A report from a consortium of economic justice advocacy organizations points to racial disparity in the types of mortgages found in white and minority communities in Charlotte and six other U.S. cities.
While government-backed, higher cost loans make up 37 percent of mortgages in predominantly white Charlotte neighborhoods, they account for 72 percent of mortgages in black and Latino communities, according to the report, which was based on 2010 Home Mortgage Disclosure Act data.
The report's authors said they did not have concrete evidence of discrimination, but they said it's a fair question in light of Wells Fargo's recent $175 million settlement of claims that it steered black and Latino homebuyers into costlier mortgages. The bank did not admit wrongdoing and said it settled only to avoid costly litigation.
The authors also rejected the argument that a difference in creditworthiness or personal income between white and minority communities makes up the difference.
"There are plenty of people out there who should be able to make their payments and keep a job even if they don't have a 620 credit score," said Adam Rust of Raleigh-based Reinvestment Partners, one of the report's authors.
The report also looks at New York City, Los Angeles, Chicago, Boston, Cleveland, and Rochester, N.Y.
While government-backed FHA or VA loans typically require a smaller down payment and are available to lower-income homebuyers, they also tend to be costlier.
Tuesday, July 24, 2012
Report cites racial lending disparities
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8 comments:
Even if they DON'T have a 620 credit score?
That's Mr. Adam Rust's standard of creditworthiness?
How can he say it's not a credit (FICO) issue?
I didn't think banks made loans to people with credit scores of 620.
Have I missed something?
This is a bogus piece of research and an extremely poor job of reporting by Andrew and Kirsten. Banks are for profits companies, meaning they are in business to make money. They don't care what color their prospective customers are, they only care if those people will pay their bills. 620 is not a good credit score, and to insinuate otherwise is a bold faced lie. Banks lend based solely upon the merits of each individual applicant. Go to the predominantly minority neighborhoods in Charlotte referenced by this report. I dare you to research the items a bank looks at: income, existing debt, assets, credit history, employment, etc. I'm pretty sure that's where you'll find your answer. If you have proven that you pay your bills, a bank will lend to you regardless of what color you are.
Just another BS piece out to make poor blacks look like victims, written by two liberal reporters who obviously didnt do their homework
"There are plenty of people out there who should be able to make their payments and keep a job even if they don't have a 620 credit score,"
Yeah, but their credit history says they have just that kind of problem.
So maybe they are ABLE, but just DON'T...
So who cares if they're ABLE?
When will the cries of "racism" on every issue end?
"they did not have concrete evidence of discrimination"
Which of course means the Observer will promote them.
Meanwhile, there's mountains of concrete evidence against bank executives who engineered the financial meltdown, yet none of them have been indicted.
As a white guy with a credit score above 810, I don't really give a crap about the whining losers (and those who loaned to them) who helped create our current economic mess.
If your credit score is 620, you have problems totally unrelated to your race.
You need to clean up your act, get your score up in the mid-700's and THEN start worrying about your skin color.
Priorities, priorities, priorities.
Work on your REAL problems first, then worry about "discrimination".
A FICO score of 620 is generally the industry threshold for qualifying for a mortgage, via private lenders or the FHA.
Many of those commenters who are indignant about this report should do some additional reading... you would learn that, even if credit scores and all other variables are equal, African American and Latino homebuyers are STILL steered into higher-cost mortgages than their white counterparts.
The mortgage system is still deceptive, and most detrimental to Latinos and African Americans. People who point this out deserve your attention, not your scorn. Learn some more before you spout off.
FYI, I'm turning off comments on this one since we're starting to get some pretty racist ones. I deleted those but left up the ones criticizing me. Shoot me an email or call if you want to talk about this.
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