Report: Twin Cities second in the nation in racial disparities in lending
Tuesday, August 05, 2008 at 10:47 am
- 6 Comments
A report released last week by the National Community Reinvestment Council reveals that the Twin Cities is number two in the nation when it comes to handing out high-cost home loans to minorities, regardless of their income. In fact, the authors analyzed Home Mortgage Disclosure Act data and found that middle- and upper-income African-Americans were twice or more as likely as their white counterparts to receive high-cost loans in 71.4 percent of the metro areas studied.
Those willy-nilly lending practices of 2005 and 2006 put the Twin Cities second in the top 20 metro areas with the most significant racial disparities overall, just behind Milwaukee, Wis. And the Twin Cities ranked fifth in the nation in the likelihood that lower- to middle-income Hispanics would get a high-cost loan, compared with whites of the same income level.
In an industrywide move that green-lined many minority neighborhoods that were once red-lined for racist reasons, the inverse became true, the report finds: Minorities, especially in the Twin Cities, became victims of predatory lending as teaser rates were used to lure customers into adjustable-rate mortgages with ballooning rates, a practice that has since led to a housing-market crash of a severity not seen since the Great Depression.
Critics of these studies love to beat the drum of low credit scores as a justifiable reason for the racial disparities. Yet the authors cite several other studies that found great disparities when even controlling for credit ratings. The reinvestment council’s report echoes those findings that barriers such as discrimination — and socioeconomic conditions caused by discrimination — played a significant role in lending discrepancies that led to the mortgage meltdown.
6 Comments
Comment posted August 6, 2008 @ 12:39 pm
It’s about time for the Minnesota Attorney General’s office to step it up and enforce our fair lending laws!
Comment posted August 5, 2008 @ 9:09 pm
Hmmmm, but when you say lower to middle income Hispanics are getting these silly loans, do you mean all the illegal aliens? You really need to start separating the 2 groups of Hispanics, because when I lived in Mexico, you had the white European Hispanics that spoke semi-good English and went to college etc, and you had the lower caste Metizzo Hispanics that committed most of the violent crime, and lived in poverty, and were of largely Indian origin. The white European Hispanics tend to come in legally, and are not overwhelming the system enough to be labeled as a secondary ethnic group to my knowlege. The Metisto Hispanics tend to not speak English very well, and tend to be illlegaly in the country, with the blessings of local businesses and local government, and also seem to cause the crime rate to go up, but I don’t see any stories on that, oh well, its the news, silly me.
Anyway, exactly who is getting the crappy loans and why? Do you have any insiders inside the loan industry? I’m sure there is a reason for this, like government enforced ‘Affirmative Action’ for minorities that pushed more unqualified minorities into “home ownership” beyond the normal qualifications that your average ‘white’ person would need to qualify. As Hispanics have a 50% dropout rate in highscool, in every state, that even Hispanic Gev Richardson could not seem to deal with after 2 or so terms in office, it is plain to see that Hispanics are not going to be a prime loan target, just on that ‘Universal’ statistic alone.
Anyway, great article, I will do some digging to find out more on why these ‘minorities’ seem to magically get these ‘bad loans’ or seem not to be able to afford them, or speak English, or graduate at higher levels in every state in America. It is a mystery but I am willing to go the distance on this one.
=)
Comment posted August 5, 2008 @ 4:09 pm
Hmmmm, but when you say lower to middle income Hispanics are getting these silly loans, do you mean all the illegal aliens? You really need to start separating the 2 groups of Hispanics, because when I lived in Mexico, you had the white European Hispanics that spoke semi-good English and went to college etc, and you had the lower caste Metizzo Hispanics that committed most of the violent crime, and lived in poverty, and were of largely Indian origin. The white European Hispanics tend to come in legally, and are not overwhelming the system enough to be labeled as a secondary ethnic group to my knowlege. The Metisto Hispanics tend to not speak English very well, and tend to be illlegaly in the country, with the blessings of local businesses and local government, and also seem to cause the crime rate to go up, but I don't see any stories on that, oh well, its the news, silly me.
Anyway, exactly who is getting the crappy loans and why? Do you have any insiders inside the loan industry? I'm sure there is a reason for this, like government enforced 'Affirmative Action' for minorities that pushed more unqualified minorities into “home ownership” beyond the normal qualifications that your average 'white' person would need to qualify. As Hispanics have a 50% dropout rate in highscool, in every state, that even Hispanic Gev Richardson could not seem to deal with after 2 or so terms in office, it is plain to see that Hispanics are not going to be a prime loan target, just on that 'Universal' statistic alone.
Anyway, great article, I will do some digging to find out more on why these 'minorities' seem to magically get these 'bad loans' or seem not to be able to afford them, or speak English, or graduate at higher levels in every state in America. It is a mystery but I am willing to go the distance on this one.
=)
Comment posted August 6, 2008 @ 7:39 am
It's about time for the Minnesota Attorney General's office to step it up and enforce our fair lending laws!
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