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Despite gains in education, income, and employment most blacks do not own a home. In fact the gap is wider now than fifty years ago with only 44.1% of blacks compared to 74.5% of whites owning a home. While the Fair Housing Act of 1968 outlawed discrimination in the sale, rental, and financing of homes, blacks are still frequently denied loans compared to similarly situated whites. The same thing is true when paying interest on a mortgage. In 2017 J.P. Morgan Chase settled a federal lawsuit for $55 million alleging discrimination against at least 53,000 black and Hispanic borrowers who were charged more for loans than whites with similar credit profiles. All of this is compounded by the systemic devaluation of homes in mostly black areas and neighborhoods. This means blacks gain less wealth from their property or money when selling it.
Between 2004 and 2008 blacks were consistently denied mortgage loans at higher rates than whites according to the Home Mortgage Disclosure Act. 2007 was the highest year with blacks being denied loans at a rate of 35% compared to just under 15% for whites. Those rates did decline to little over 15% for blacks and slightly over 5% for whites in 2018. What's going on here? Maybe it's not race. What about debt or credit ? Blacks are twice as likely as whites to have student loan debt over $ 10,000 dollars. When it comes to credit which essential to getting loans the Urban Institute found only 20% of blacks scored 740 or higher which is the best score for most lenders. However credit scores only accounted for 22% of the gap between blacks and whites. Even when blacks get loans they are charged more than similarly situated whites.
Raheem Hanifa with the Harvard based Joint Center for Housing Studies found blacks with incomes of $75,000 to $ 100,000 paid a higher rate of interest at 4.125% compared to whites with incomes of $ 30,000 who paid 4.16%. Blacks with incomes of $ 30,000 or less paid 4.267%. For blacks in the $ 30,000 to $ 44,999 income rage the median interest rate was 4.506%. For whites it was 4.213%.
Even when blacks get loans at comparable interest rates to whites their property is systematically devalued at levels of 21 to 23% when black homes are located in mostly black areas or neighborhoods according to the Brookings Institute which looked 113 metropolitan areas across the U.S. This was after adjustments for size, age, and physical condition. This problem is compounded by racially biased home appraisals. In February of 2023 Paul and Tenisha Tate-Austin of Marin City, CA just reached a settlement in Federal lawsuit.
In 2016 the couple bought a home listed at $ 500,000. They later renovated the property adding up to 1000 square feet. The Austins then sought refinancing to pay for the work. Their lender assigned a white Appraiser named Janette Miller to look at the property who valued the house at $ 995,000. This was despite the fact the house had been appraised at 1,450,000 a year earlier. The Austins could not believe it. They told their lender they disagreed and were concerned race was an issue. They removed any clues or signs that a black person lived in the home. They also had a white friend stand in for them at a second appraisal that came back at $ 1,482,000.
Some people are still not convinced that systemic racism has anything to do with these disparities. They will wrongly question blacks spending habits, willingness to save or ability to manage their money. They will say that blacks aren't smart or responsible with their finances. However blacks are no better or worse than whites. The fact is we still have a race problem despite the progress America has made. Owning a home provides stability. It is an important source of intergenerational wealth too. Everything we believe about individual freedom and economic prosperity is tied to private property. Having your own home is the most basic example of that. Systemic racism undermines black homeownership. This is a matter for both political and business leaders. More importantly, it should be a reminder to blacks that our struggle for freedom and equality continues. With so much talk about reparations, police brutality, killings, and the controversy surrounding the teaching of black history in schools; we shouldn't fail to consider the importance of homeownership to our collective wellbeing. If there's a reason for protest or advocacy this is one.
SOURCES
https://www.jchs.harvard.edu/blog/high-income-black-homeowners-receive-higher-interest-rates-low-income-white-homeowners
https://www.reuters.com/article/us-jpmorgan-lawsuit/jpmorgan-agrees-to-55-million-settle-of-mortgage-discrimination-complaint-source-
https://abc7news.com/wells-fargo-lawsuit-racism-allegations-lending-discrimination-civil-rights-
https://www.msn.com/en-us/money/companies/column-wells-fargo-denied-well-off-borrowers-low-
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1 comment:
Your facts are impossible to dispute.
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