RED LINING...

Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans OR AT RATES FAR HIGHER THAN THEIR WHITE COUNTERPARTS. THIS MODERN-DAY REDLINING PERSISTED IN 61 METRO AREAS EVEN WHEN CONTROLLING FOR APPLICANTS' INCOME, LOAN AMOUNTS AND NEIGHBORHOODS, ACCORDING TO MILLIONS OF HOME MORTGAGE DISCLOSURE ACT RECORDS ANALYZED FROM THE CENTER FOR INVESTIGATIVE REPORTING. The yearlong analysis, based on 31 million records, relied on TECHNIQUES USED BY LEADING ACADEMICS, THE FEDERAL RESERVE AND DEPARTMENT OF JUSTICE TO IDENTIFY SYSTEMIC LENDING DISPARITIES. IT FOUND A PATTERN OF TROUBLING DENIALS FOR PEOPLE OF COLOR ACROSS THE COUNTRY, INCLUDING IN MAJOR METROPOLITAN AREAS SUCH AS ATLANTA, DETROIT, PHILADELPHIA, ROCKFORD, Ill., ST. LOUIS AND SAN ANTONIO. AFRICAN AMERICAN'S FACED THE MOST RESISTANCE IN SOUTHERN CITIES - MOBILE, ALABAMA; GREENVILLE, NORTH CAROLINA; AND GAINESVILLE, FLORIDA - AND LATINOS IN IOWA CITY, IOWA. NO MATTER THEIR LOCATION, LOAN APPLICANTS TOLD SIMILAR STORIES, DESCRIBING AN UPHILL BATTLE WITH LOAN OFFICERS WHO THEY SAID APPEARED TO BE FISHING FOR A REASON TO SAY NO. AFRICAN AMERICANS ARE 2.7 TIMES AS LIKELY AS WHITES TO BE VICTIMS OF SYSTEMIC RACISM/AKA REDLINING THUS DENIED A CONVENTIONAL MORTGAGE. THE COMMUNITY REINVESTMENT ACT OF 1977 WAS DESIGNED TO CORRECT THE DAMAGE OF REDLINING, A NOW-ILLEGAL PRACTICE IN WHICH THE GOVERNMENT WARNED BANKS AWAY FROM NEIGHBORHOODS WITH HIGH VOLUME REDLINING HISTORY IN THE 1930s, SURVEYORS WITH THE FEDERAL HOME OWNERS' LOAN CORPORATION DREW LINES ON MAPS AND COLORED SOME NEIGHBORHOODS RED, DEEMING THEM "HAZARDOUS" FOR BANK LENDING BECAUSE OF THE PRESENCE OF AFRICAN AMERICAN'S OR EUROPEAN IMMIGRANTS, ESPECIALLY JEWS. REDLINING HAS BEEN OUTLAWED FOR HALF A CENTURY. AND FOR THE LAST 40 YEARS, BANKS HAVE HAD A LEGAL OBLIGATION UNDER THE COMMUNITY REINVESTMENT ACT TO SOLICIT CLIENTS - BORROWERS AND DEPOSITORS - FROM ALL SEGMENTS OF THEIR COMMUNITIES. BUT IN MANY PLACES, THE DAMN LAW HASN'T MADE MUCH DIFFERENCE. The analysis - independently reviewed and confirmed by The Associated Press - showed BLACK APPLICANTS WERE TURNED AWAY AT SIGNIFICANTLY HIGHER RATES THAN WHITES IN 48 CITIES, LATINOS IN 25, ASIANS IN NINE AND NATIVE AMERICAN'S IN THREE. IN WASHINGTON, D.C., THE NATION'S CAPITAL, ALL FOUR GROUPS WERE SIGNIFICANTLY MORE LIKELY TO BE DENIED A HOME LOAN THAN WHITES. "IT'S NOT ACCEPTABLE, from the standpoint of what we want as a nation: to make sure THAT EVERYONE DOESN'T SHARE IN ECONOMIC PROSPERITY," Yet Curry's GOVERNMENT INSPECTION AGENCY WAS PART OF THE PROBLEM, DEEMING 99 PERCENT OF BANKS SATISFACTORY OR OUTSTANDING BASED ON BIASED INSPECTIONS ADMINISTERED UNDER THE COMMUNITY REINVESTMENT ACT. AND THE JUSTICE DEPARTMENT SUED JUST NINE FREAKING FINANCIAL INSTITUTIONS FOR FAILING TO LEND TO PEOPLE OF COLOR UNDER THE OBAMA ADMINISTRATION. THE LAW NEEDS TO BE UPDATED, REFORMED WITH STIFFER  PENALTIES FOR NON-COMPLIANCE. "THE COMMUNITY REINVESTMENT ACT HAS NOT AGED WELL THE TRUMP ADMINISTRATION HAS GONE THE OTHER WAY, WEAKENING THE STANDARDS BANKS MUST MEET TO PASS A COMMUNITY REINVESTMENT ACT EXAM. NOT SURPRISINGLY, DURING DONALD TRUMP'S FIRST YEAR IN OFFICE, THE JUSTICE DEPARTMENT SCOUNDRELS DID NOT SUE A SINGLE LOUSY LENDER FOR RACIAL DISCRIMINATION. A growing housing gap THE DISPROPORTIONATE DENIALS AND LIMITED ANTI-DISCRIMINATION ENFORCEMENT HELP EXPLAIN WHY THE HOMEOWNERSHIP GAP BETWEEN WHITES AND AFRICAN AMERICAN'S IS NOW WIDER THAN IT WAS DURING THE JIM CROW ERA. IN THE UNITED STATES, "WEALTH AND FINANCIAL STABILITY ARE INEXTRICABLY LINKED TO HOUSING OPPORTUNITY AND HOMEOWNERSHIP," SAID LISA RICE, EXECUTIVE VICE PRESIDENT OF THE NATIONAL FAIR HOUSING ALLIANCE, AN ADVOCACY GROUP. "FOR A TYPICAL FAMILY, THE LARGEST SHARE OF THEIR WEALTH EMANATES FROM HOMEOWNERSHIP AND HOME EQUITY." The latest figures from the U.S. Census Bureau show the median net worth for an African American family is now $9,000, compared with $132,000 for a white family. Latino families did not fare much better at $12,000. Lenders and their trade organizations do not dispute the fact that they turn away people of color at rates far greater than whites. But they maintain that the disparity can be explained by two factors the industry has fought to keep hidden: the prospective borrowers' credit history and overall debt-to-income ratio. They singled out the three-digit credit score - which banks use to determine whether a borrower is likely to repay a loan - as especially important in lending decisions. "While quite informative regarding the state of the lending market," the records analyzed by Reveal do "not include sufficient data to make a determination regarding fair lending," the Mortgage Bankers Association's chief economist, Mike Fratantoni, said in a statement. The American Bankers Association said the lack of federal enforcement proves discrimination is not rampant, and individual lenders told Reveal that they had hired outside auditing firms, which found they treated loan applicants fairly regardless of race. "We are committed to fair lending and continually review our compliance programs to ensure that all loan applicants are receiving fair treatment," Boston-based Santander Bank said in a statement. This Nov. 12, 2017, photo provided by Reveal shows Point Breeze neighborhood in Philadelphia. Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied conventional mortgage loans at (Sarah Blesener / Reveal via AP) New Jersey-based TD Bank, which denied a higher proportion of black and Latino applicants than any other major lender, said it "makes credit decisions based on each Customer's credit profile, not on factors such as race or ethnicity." Reveal's analysis included all records publicly available under the Home Mortgage Disclosure Act, covering nearly every time an American tried to buy a home with a conventional mortgage in 2015 and 2016. It controlled for nine economic and social factors, including an applicant's income, the amount of the loan, the ratio of the size of the loan to the applicant's income and the type of lender, as well as the racial makeup and median income of the neighborhood where the person wanted to buy property. Credit score was not included because that information is not publicly available. That's because lenders have deflected attempts to force them to report that data to the government, arguing it would not be useful in identifying discrimination. In an April policy paper, the American Bankers Association said reporting credit scores would be expensive and "cloud any focus" the disclosure law has in identifying discrimination. America's largest bank, JP MORGON CHASE & CO., HAS ARGUED THAT THE DATA SHOULD REMAIN CLOSED OFF EVEN TO ACADEMICS, CITING PRIVACY CONCERNS. STUDIES HAVE FOUND PROPRIETARY CREDIT SCORE ALGORITHMS TO HAVE A DISCRIMINATORY IMPACT ON BORROWERS OF COLOR. THE NEANDERTHAL "DECADES-OLD CREDIT SCORING MODEL" CURRENTLY USED "DOES NOT TAKE INTO ACCOUNT CONSUMER DATA ON RENT, UTILITY, AND CELLPHONE BILL PAYMENTS," "THIS EXCLUSION DISPROPORTIONATELY HURTS AFRICAN-AMERICAN, LATINOS, AND YOUNG PEOPLE WHO ARE OTHERWISE CREDIT-WORTHY." ___ A CASE STUDY: PHILADELPHIA PHILADELPHIA WAS ONE OF THE LARGEST CITIES IN AMERICA WHERE AFRICAN AMERICAN'S WERE DISPROPORTIONATELY TURNED AWAY WHEN THEY TRIED TO BUY A HOME. AFRICAN AMERICAN'S AND NON-HISPANIC WHITES MAKE UP A SIMILAR SHARE OF THE POPULATION THERE, BUT THE DATA SHOWED WHITES RECEIVED 10 TIMES AS MANY CONVENTIONAL MORTGAGE LOANS IN 2015 AND 2016. WHAT BLATANT DISPLAY OF SYSTEMIC RACISM! BANKS ARE FOCUSED ON SERVING THE WHITE PARTS OF TOWN, PLACING NEARLY three-quarters of ALL BRANCHES IN WHITE-MAJORITY NEIGHBORHOODS, COMPARED WITH 10 PERCENT FOR BLACK NEIGHBORHOODS. Reveal's analysis also showed that the greater the number of African Americans or Latinos in a neighborhood there, the more likely a loan application there would be denied - even after accounting for income and other factors. When Faroul applied for a loan in April 2016, she thought she was an ideal candidate. She holds a degree from Northwestern University, had a good credit score and estimates she was making $60,000 a year while teaching computer programming as a contractor for Rutgers University. Still, her initial loan application was denied by Philadelphia Mortgage Advisors, an independent broker that made nearly 90 percent of its loans to whites in 2015 and 2016. "I'm sorry," broker Angela Tobin wrote to Faroul in an email. Faroul's contract income wasn't consistent enough, she said. So Faroul got a full-time job at the University of Pennsylvania managing a million-dollar grant. We are committed to fair lending and continually review our compliance programs to ensure that all loan applicants are receiving fair treatment. But that still wasn't enough. When she tried again a year later, this time at Santander Bank, a Spanish firm with U.S. headquarters in Boston, the process dragged on for months. Eventual