This page has been archived and commenting is disabled.
In Baltimore, Race Is The Deciding Factor In Mortgage Lending
In many ways, the riots that left parts of Baltimore smoldering in late April were the culmination of 9 months of worsening race relations in the US.
The death of Eric Garner, the unrest in Ferguson, and the shooting of Walter Scott all served to create a palpable sense of distrust between African Americans and white police officers and when Freddie Gray died, the stage was set for a night of anarchy in the streets. A “purge” as it were.
In the wake of the riots, some were quick to point out that while much of what took place on the night of April 27 is inexcusable regardless of any mitigating socioeconomic factors, the anger and frustration in some predominantly African American communities emanates from a lack of opportunity. Put simply, social mobility for some minorities is severely constrained by myriad hurdles that in many cases prove to be all but insurmountable. That’s not an attempt to excuse antisocial behavior, and it's certainly not to say that those who possess an iron will and uncanny resolve can't succeed despite all odds, it’s simply to say that "equality of opportunity" doesn't exist in America. Plain and simple.
Recall that back in May, The New York Times (drawing on research from Harvard economists Raj Chetty and Nathaniel Hendren) took a look at income mobility and, by extension, the best and worst places to live in America.
Here’s how we described the study at the time: The goal of the study (and its predecessors) is to determine the most effective way to imporove economic outcomes for low-income children. Here, the researchers "focus on families who moved across areas to study how neighborhoods affect upward mobility." Unsurprisingly, Chetty and Hendren "find that every year of exposure to a better environment improves a child’s chances of success."
Here are some screenshots from the interactive map presented by The Times which should tell you all you need to know about social/ income mobility and Baltimore:
In this context, we present a few excerpts from a New York Times piece out Monday which takes a look at a new study by the National Community Reinvestment Coalition who looked at mortgage lending in Baltimore.
Perhaps not surprisingly, the Coalition found that the most important determinate for loans was the racial composition of the neighborhood. Not income. Not credt. But race.
Here's more:
The black population of Baltimore is double that of the white population. Yet in 2013, banks made more than twice as many mortgage loans to whites in the city as they did to blacks.
The stark difference in mortgage lending, derived from the most recent government mortgage data, is the focus of a new study that will be released on Tuesday by the National Community Reinvestment Coalition, a consumer advocacy group.
Still, the coalition says its analysis shows that the racial makeup of a neighborhood — and not income, for instance — is the most significant predictor of whether a loan gets made in Baltimore.
“If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim,” said John Taylor, the coalition’s president. “In Baltimore, the prevailing factor behind who gets a mortgage is the racial composition of the neighborhood.”
As The Times notes, "it has long been the case that the rate at which blacks get denied a mortgage is higher than that for whites" and indeed, there appear to be legitimate reasons for this. "According to the Fed’s analysis of the government mortgage data from 2013, banks said credit history was the reason behind 30 percent of their denials of black borrowers. For whites, banks said it was the cause in 22.5 percent of the cases," NYT adds.
But that's not what's going on in Baltimore.
First, here are the raw numbers (which should themselves give you pause even if you're skeptical about the study itself):
In 2013, 797 loans were made to blacks in the city, a seemingly tiny number considering that Baltimore’s black population totals almost 400,000. Some 2,000 loans were made to the city’s 175,000 whites.
Here's where it gets bad:
In lower-income areas of Baltimore where minorities made up 10 to 19 percent of the population, 72 percent of mortgage applications were approved. But in lower-income areas where minorities made up more than 80 percent of the population, only 59 percent of applicants were approved.
So we're talking about low-income borrowers in both cases. In other words, t's not about the borrowers' ability to service the debt. Banks simply don't want you buying houses in black neighborhoods. It looks to be as simple as that.
Incredibly, the numbers are even worse for high-income borrowers:
Higher-income borrowers in Baltimore were approved for 64 percent of the loans they applied for in areas where the minority population exceeded 80 percent. But the approval rate was 82 percent for higher-income borrowers in areas where minorities made up less than 10 percent of the population.
In other words, even if you make a lot of money, the bank is far less likely to give you a loan for a house in a black neighborhood in Baltimore.
Now admittedly, banks are likely just protecting their interests. That is, you don't want to end up sitting on a book full of loans you made for homes that you think are likely to fall in value.
But bear in mind that you can't have it both ways. You can't say, "ok take some initiative, work, build credit, buy a home, and do your part to lift your community out of the proverbial gutter", and then at the same time say "well, then again, we can't give you a loan because your neighborhood is mostly black." That won't work and will only serve to perpetuate the status quo. Here's The Times again:
One of the chief concerns among consumer advocates is that banks have effectively written off certain neighborhoods. Lenders, for instance, may shun creditworthy borrowers in neighborhoods where blacks are the majority because they may not believe that house prices will rise by much in such areas. But if banks avoid economically challenged areas for that reason, it could make it more unlikely that house prices will rise.
As always, we're not taking one side or the other, but what the above does underscore is the fact that changing the circumstances which contribute (note we did not say "cause" we said "contribute") to the types of social unrest we witnessed last April can be exceptionally difficult when the deck is stacked.
»
- 213 reads
- Printer-friendly version
- Send to friend
- advertisements -
I wouldn't live near a CVS. Didn't I see Fred Thompson hawking reverse mortgages in that neighborhood?
1.) Quit breeding like rats
2.) Quit paying people to breed like rats for their votes .... It's called slavery
3.) Maybe going to school and learning some shit is a good idea
4.) Aw shit, just give everybody a free home, car, phone, healthcare, college diploma, food and circuses and everything'll be OK.
Then we won't need racially biased affordability studies
PS The whole logic of the Coalition's argument is Place undue debt burden on the poor and they'll make it work out just fine.
Who the fuck paid for this, Goldman and JP Morgan?
This is a liberal community. They are of course the only ones that care about black lives. It's science.
“If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim,” said John Taylor, the coalition’s president
So if I understand this right, blacks can not get out of poverty unless they are allowed to go into debt ?
Credit Scores Matter!!
Pound sign BlackCreditScoresMatter
This is simply round two, setting us TAX PAYERS, and future generations, up to have to pay for all of the mortgage defaults created by the gubmint FORCING banks to loan money to people who won't pay it back. Gubmint f*cks it all up again...
The problem is that computer algorithms are racist. Huge ensembles of nth regression algorithmic and machine learning data mining analytic tools that perform risk analyses all evolve to become racist. Even though the risk analysis algos are denied race as an input they figure out a way to infer race from the remaining data set. This proves that mathematics is racist, biased, and bigoted and it should not be taught in the schools. Our youth need a safe place away from Pascal, Euler, Gauss, Archimedes, and others.
I was in the banking industry and did a lot of loans. Niggas got bad credit. They dont pay their bills at least 90% of them. Even the ones with jobs and money. Thus only sub-prime would touch them but not even in those shit ghetto neighborhoods. Red lining is alive and well.
Don't Micro-Aggression me bro!
This article is the usual PC lies. Black dysfunction and lack of intelligence is why they are still savages and should be expelled from the US.
Debt is not inherently a bad thing. If it is used for productive investments it can be a great boon (e.g. micro credit loans in developing countries, which have lifted many in the 3rd world out of poverty). It is only when debt is wasted on unproductive assets that it becomes a liability to the debtor.
This report also shows unambigiuously that the systemic discrimination of blacks not only remains widespread throughout American society, but is on the rise again.
If the government would quit backstopping mortgages and lowering lending standards, housing prices would have to decrease until they are based on fundamentals. Instead, because of this and the Fed's easy money policies, housing prices have skyrocketed. The same thing happened to student loans, the government got involved by guranteeing the loans and prices soared. Most people in the US are paying a large portion of their paycheck on housing, so more debt is not going to help and will only make things worse for the 99%.
aGREED!
I'm so sick of competing with all these credit fueled wankers. Drives all costs up because they don't give a rat's ass what it costs, they will pay for it later (suuuuure). In the mean time I'm getting reamed.
Then the liberal community should loan its money to blacks in Baltimore and take on the risk that the borrower doesn't default (including voluntary defaults) or their neighbors don't destroy the neighborhood and thus the value of the title that collateralizes the loan.
Banking isn't particularly difficult, especially if you aren't greedy, so why don't all the SJW's pool their life savings and open a bank?
"Then the liberal community should loan its money to blacks in Baltimore and take on the risk that the borrower doesn't default."
AMEN! Let the free market work. Stop the gubmint from forcibly taking from me to lend to people who will default. It's all about vote buying.
"Race" is also a deciding factor in college admissions and scholarships and job promotion these days.
Better not check off that "Caucasian" box; you'll regret it when you find yourself rejected from most of your choices.
FREAKING BINGO!!! If you don't want melanin content (skin color) to be a determining factor then STOP ASKING FOR OUR "RACE" ON APPLICATIONS!!!
The most non-racist thing we could do is make it illegal to ask for race. Credit applicants should be judged purely by financial means, and college applications should be judged purely on academic performance.
America really sux. If you can't get that home loan, maybe move to Venezuela or Libya. I am sure they are more fair there.
better not to get a mortgage these days anyway. When the time comes, a black guy, who is smart enough, will know where to buy and will be able to pull it off. Baltimore is probably the last place anybody should buy a house anyway.
Until then just rent.. move in and don't pay till the sheriff comes.
Rinse repeat....
study doesn't contain anything involving credit scores, hilariously.
you can be black and high income, but still have shit credit, quite easily.
If you were loaning someone money and the collateral that was backing it could fall in value (ie bad crime neighborhood ) I know I wouldn't be antsy to lend either.
Also, are these first time buyers? are the properties principal residences? how many are Reno loans in each case? down payment prrcentage ?without this info it's apples to fucking oranges.
To prove that X is a factor you have to prove that all other factors were equal. Any critical thinker knows this.
To prove race is a deciding factor you have to prove that where income, job security, debt to income ratio, and credit worthyness were equal more blacks were turned down. It's remarkable how few people have learned to be skeptics these days.
Critical thinking and empiricism would decimate the Free Shit Army.
I agree with your assessment here, Pirate.
This seems to be nothing more complicated than banks adjusting their lending standards based on the aggregate risk per neighborhood, with the highest default rates occuring in the neighborhoods that are (not suprisingly) the most black. I think that these small commercial lending banks and their branches (I'm not talking about the upper echelons of banksterism here) generally have a good idea of how to run their own businesses and they tend to know a bad credit risk when they see one.
Maybe the Russians can solve this issue and clean house?
Im not a supporter of the cult of the banksters but I wouldnt loan my money out in those neighborhoods either. Maybe the SJW could pool their money and loan their own money out.
Ha ha! Some f*cking chance of that.
nevermind
This article is garbage. It gives no reference to credit history or debt to income ratios. I honestly doubt a bank would not loan to someone based on ethnicity, they are far more concerned about their bottom line.
If the borrowers were equal in economic terms then the writer would have a point but their just isn't enough evidence to back up that notion.
dat be razizst
I need a safe place to weep in terror of somebody down-voting me
From my experience the Blacks that work do succeed. They have way more opportunity than white males do to affirmative action. This article was total crap. The author cannot possibly live in the real world and write this crap or expect people with even half a brain to believe it. Universities are just as bad. To get in whites need an A average, blacks a B and Hispanics, please do us a favor and enroll.
"From my experience the Blacks that work do succeed. "
You mean there actually are blacks who work? Well you learn something new every day.....
This is a complete bullshit article.
Guess what percentage of homes that are bought with cash get foreclosed. Go ahead, guess!
That's right.
And to tell the average financially illiterate African American in fat-assed, lazy, ignorant, drug-addicted Baltimore, that they're getting screwed because they're not getting home loans is about as honest as the government continuing to tell everyone al Qeada did 9-11, the planes knocked down any of the three towers that fell, and a passport of the chief hijacker was found in the street after the crash. Holy fuck, people are stupid.
The lies are being spread pretty thick in the U.S. right now. ZH should try real hard not to spread the lies any deeper than they are.
ZIRP and a grotesquely inflated housing market are the devil's piss in the ointment, not racial prejudice in home loans. Given supply, housing should be so cheap right now, any half-way ambitious young man should be able to buy a home with cash.
"...any half-way ambitious young man should be able to buy a home with cash."
Surely you jest or out of touch with reality.
What skill do you have that might better those around you that is worthy in payment of my (our) labor?
Banks/government is fucking the middle class any way possible. That's the take away here.
To quote this dumbass piece, "The New York Times (drawing on research from Harvard economists Raj Chetty and Nathaniel Hendren) took a look at income mobility and, by extension, the best and worst places to live in America.
Here’s how we described the study at the time: The goal of the study (and its predecessors) is to determine the most effective way to imporove economic outcomes for low-income children. Here, the researchers "focus on families who moved across areas to study how neighborhoods affect upward mobility." Unsurprisingly, Chetty and Hendren "find that every year of exposure to a better environment improves a child’s chances of success."
If the New York Times truly gave a rat's ass about a given child's chances of success, they would be out there promoting traditional marriage along with the notion of raising children in two parent families.
Put those Syrian refugees in Baltimore .... and other ... black communities .... so we can watch the creative chemistry .... the energetic Muslims .... might show the blacks .... how to improve their GNP (Gross Negro Product) .... it's worth a try .... and might be amusing ?
I'll take a random 100 Syrians over 100 random U.S. negroes every time.
The only color banks give a shit about is GREEN. I have never had a bank ask me what race the money came from.
so banks refuse to take on the risk of owning property in neighborhoods comprised primarily of people who have demonstrated for decades they can explode at any minute and burn the place down?
Those racists!
This was the same thing Andrew Cuomo thought when he was the HUD chair during the late 90s forcing lenders and create lending programs to make the same risky loans that are still prevalent today.
We all know how well that turned out...
If you give a nigger free food, free clothing, free healthcare, free fone, and you want him to take care of his own home after years of free housing vouchers, you shouldnt be surprised when that nigger doesnt make the mortgage payments.
I'm sure the author of this article knows the answer to this question but for some reason it was not answered in the article - did the poor whites who got mortgages have higher credit scores than the poor blacks?
Another way of asking - did poor blacks with high credit scores get denied mortgages while whites with lower scores got approved?
Very good comment, yea for reading comprehension!
"social mobility for some minorities is severely constrained by myriad hurdles "
Agreed. Hurdles like being illiterate, violent, undiciplined, corrupt, incompetent.....
"Hurdles like being illiterate, violent, undiciplined, corrupt, incompetent....."
Precisely right
Oh how I love the white trash that exists on ZH.
God, you're a fucking loser.
Bernie Sanders lives. Fuckin parasite.
This whole article is BULLSHIT. The Tylers are using the same old tired racist argument they use for prison populations being mostly black...It's always "racism". Bullshit.
Go burn a cross you white trash loser.
Agreed. Officers involved in the Freddie Gray case were black; the majority of the police force in Baltimore is black; the police commissioner was black; the mayor is black; over 70% of the city council members are black.
Over 200 small businesses were forced to shut down during the riots, not to mention the larger economic impact on tourism. As Baltimore passes the 300 homicide mark this year, it is a reminder that a lack of basic safety drives out the environment needed to bring people out of poverty.
govt. going to hit the middle-class with a tri-fecta.
qe-4, for blacks only ninja-loans, for housing in middle-class neighborhoods, only.
If your primary "investment" is an Escalade with spinner rims...you're probably not likely to have the downpayment necessary to put down on a home.
I know a landlord who owns around 24+ hood properties in the city. He's a good guy who takes care of the units (and if it weren't for landlords there'd be double the number of vacants/abandoned properties) and goes above and beyond like providing LED bulbs and a washer and dryer in order to save his tenants money on electricity and laundromat costs, which are risky to provide (due to theft or just damage due to ignorance/negligence) but in his mind he's providing one of the more quality services in the hood and he has a good enough community rep that he doesn't get robbed or even glared at while walking through his primary neighborhood.
And providing such amenities, which save his tenants money, means there are more likely to pay their rent on time and in full. Sometimes they don't. Sometimes an eviction has to be dealt with, but an extra 180k/year in the pocket isn't bad. Rents are in the 700-1000/mo range, but there are expenses. And it took him a LONG time to get to that standing....and a lot of risk.
Besides. Owning property in the hood isn't all it's crack'd up to be. How are these people going to fix up their own properties? Lack of forward-planning is the major obstacle. They simply won't have the savings for emergencies, and even routine repair/maintenence costs will be pushed back to ever later dates until....well they just won't happen at all. There's a reason a lot of the city is in the condition that it's in.
Why give a mortgage to somebody who most likely won't/can't pay it back???
What?! Banks are reluctant to loan money for homes in violent, low income neighborhoods? Shocking!
People turn their city into a police-free warzone and then riot because of lack of economic opportunity because businesses won't locate there. Heartbreaking!
When did Tyler turn into such a liberal crybaby? If Tyler thinks home loans to distressed neighborhoods are good business then why doesn't he (they) make the loans himself. They must be raking in money judging from all of the bank and financial ads that clutter up the website (and make the pages take forever to load).
Cotton can be harvested by machine these days. If I thought they were capable of gratitude I'd expect Baltimore's feral blacks to be grateful not to have been dispatched to the dogfood and glue factory decades ago.
If the South had won her freedom, that's exactly what would have happened by now.
Back in our time line, even banksters know better than to lend any more money to black people than they can get away with. At best, it's a cost of doing business, their pitifully small share of the cost of feeding, watering and housing the FSA.
Racism? Save your crocodile tears for someone who's been an actual victim of racism. Only Israel's getting enough nuclear weapons to destroy every important financial capital convinced our masters that it's no longer in good taste to murder Jews for fun.
I don't care
Even with good credit, a loan on a used car is about 7%. The loan on a used house is less than 3%. The difference is that one is a depreciating asset, and one is an appreciating asset. If the collateral (house) is expected to fall in value, the interest rate needs to be higher to compensate for that risk. This means the market strongly favors cash buyers - hedge funds.
How does increasing the number of foreclosures and bank-owned real estate in black areas raise school performance and fatherhood rates in the black community?
it’s simply to say that "equality of opportunity" doesn't exist in America. Plain and simple.
BULL FUCKING SHIT
I didn't need to read anything more to give this story a zero.
America has equality of opportunity if you are willing to work for it. It is easier for blacks to get into college than whites if they try at all. It is easier for blacks to get welfare if they don't feel like working.
It isn't the fault of white people that black society is worth less than a flattened penny. IT'S THE FAULT OF THE BLACK PEOPLE THAT THEY HAVEN'T MADE ANYTHING OF THEMSELVES. The average black person makes more than 50% of working America through welfare benefits. There are more luxury cars in the ghetto than in most true middle class towns. If things were so bad for blacks, no black person in the ghetto could afford to drive a new Cadillac or Trailblazer.
Why would a bank loan money to a black person with no credit, no job, and no assets other than a government welfare check? Should we be forced to give loans so blacks can buy homes they can't afford?
Here's another news flash, THEY ALREADY LIVE IN HOMES THEY CAN'T AFFORD!!!!!!!
MOTHER FUCKING GOD, HAVE YOU SEEN WHAT THE NEW HOUSING PROJECTS LOOK LIKE!!!!
The publicly traded homebuilders have been building inner city neighborhoods for the past decade that look like picturesque towns anybody would be proud to live in. The tribe doesn't care and the government doesn't care. It keeps people in power and sends homebuilder stocks up. If they were in better neighborhoods and sold at market prices, the townhomes would be out of reach of almost everyone outside the top 10%.
I want equality. Equality means your race doesn't mean jack shit. There is no box on an application for race. There isn't even a place for a name. Just your accomplishments and your experience. If you don't advance, it's your own damn fault.
If 80% of black America dies because they can't feed themselves or produce anything of value, so be it. That's fucking nature and we've been trying to stave off reality for far too long.
I've been to Baltimore many times. It is a shithole outside a few areas. I've lived in areas that went black. When the whites take over an area that used to be inhabited by blacks, they call it gentrification. All of sudden business returns. When blacks take over an area that was inhabited by whites, it turns into a dilapidated ghetto. It that the fault of white people?
I think you have to look at the facts. You can only come to the conclusion that what has happened to black America is the fault of black America.
These "studies" never show the approval rate for Asians.
Because that would shatter the Communist narrative of:
"OmeriKa Racist" "Whites Racist" "Gimme Free Stuff" "Not Enuf" "Tear it all Down!"
Why, Tyler, did you forget about the CRA - the Community Reinvestment Act? When it was first designed and passed into law by Carter, it attempted to lessen the habit of banks not lending to people that couldn't pay their loans back.. It evolved into banks are required to fork over so many dollars in loans fully aware they will never see that money again as the people that are being lent the money don't give a rats ass about paying it back. And, know that they don't have to because that liberals have their backs.
Of course, you don't see it directly. But, you and me and everyone else pays more in fees, get less in interest on our savings, and there are less loans in total because money is stuck in non performing loans ( that's bank speak for the deadbeats had likely not made even payment one and never had any intention of doing so). because of it.
What??? No study about the above?
And then there is inevitable - nah! this will never happen - conclusion that forcing the CRA, now on steroids, on lenders resulted in the debacle of 2005-2008 aided and abetted by the likes of Freddie Mac which are supposed to be the government gate keeper guarding the taxpayer's money simply stopped doing their job - on purpose! The lenders concluded that everyone is backstopped and so lent to anyone with a pulse because again the likes of Freddie Mac were OKaying the loans and back stopping the debtors and lenders. Well, until they weren't . . .
And, now here we are again with some dumbass liberals telling us the poor downtrodden black people are getting the shiv by those mean racists bankers. While we are still reeling from the last government forced debacle. Yeah, up yours.
By the way, Erice Garner was arrested for selling individual cigs without paying sales tax owed - what would amount to a couple of dollars on a good day (WTF??? - are we taxing the shit that comes out of ass next?) - and the take down by the white officers was ordered by a black female sergeant cop (take a close look at the video - she often is just out of the camera's view). So, it was a black female police officers that ordered the arrest of a morbidly fat black man for filching a couple of dollars in taxes.
Meanwhile, we learned today that the Clinton's "charity" just refiled their taxes for the last five years whereas almost ten million dollars of it is being reporting for the first time!.
We await the take down of the Clinton's - any day now - no really - it's going to happen! #clintonlivesmatter
Science and statistics be racis' n' sheet.
Blacks are trained to be angry from the day they are born.
Thanks to Jesse Jackson, Al Sharpton and all the other black traitors who teach anger and suck up donations from these already financially poor people.
If you are angry, you can't think. If you can't think, you are someone else's pawn.
George Soros has no issue with this - minimum wage for staged riots/protests to help his own agenda.
Loose the anger and see what happens choclates.
The hilarious thing about racial hiring and racial free shit is that it still doesn't favor black Americans. My office has several black employees, but guess where they came from. All African born, all are well educated, speak multiple languages, lived in multiple countries, excellent work ethic, show up early for work, very friendly. Africans also have really cool accents and big smiles.
It's amazing how most commenters here are experts at knowing all the solutions to minority's problems.
&, if they're valid problems, it's never the fault of anyone but the effected, even though commenters blame the government for all of their problems. In other words, minorities are not allowed to complain about their situation because it's always their fault.