In at least 61 metropolitan areas in the United States, minorities are being denied home loans, a Reveal from The Center for Investigative Reporting investigation has unveiled.
The report has revealed that African-Americans and Latinos are regularly denied home loans at banks. When compared to how often white individuals are granted home loans in some particular cities, such as Philadelphia, people of color are 2.7 times as likely as whites to have their mortgage application denied.
But that’s not the only location where banks are actively keeping minorities from owning homes. The issue also impacts Washington D.C., Atlanta, Detroit, St. Louis, San Antonio, Tulsa, Orlando, and several other metros, making 48 cities where black applicants were more likely to be turned away and 25 cities where Latinos were less likely to be approved.
Asians were less likely to be approved in nine cities, while Native Americans were disproportionately impacted in at least three.
In the country’s capital, all minorities were far less likely to be approved for a home loan than their white counterparts.
When asked if they had a problem lending to minorities, lenders actually did not dispute the claim. Instead, they said that credit history and the applicant’s overall debt-to-income ratio is what’s to blame for the disparity.
The credit score is particularly important, they added.
Despite their explanation, Lisa Rice, the executive vice president for the advocacy group National Fair Housing Alliance, said that it’s clear as more African-Americans and Latinos are denied loans, the larger the gap of wealth between whites and people of color becomes.
In America, she said, “wealth and financial stability are inextricably linked to housing opportunity and homeownership.”
“For a typical family, the largest share of their wealth emanates from homeownership and home equity,” she added.
With the average African-American family’s net worth at $9,000, and the average white family’s net worth at $132,000, it’s obvious that the banks’ policies are helping to keep a great number of people in poverty.
To Thomas Curry, who served the Office of the Comptroller of the Currency between 2012 and 2017, the fact banks are discriminating against minorities is unacceptable.
“It’s not acceptable from the standpoint of what we want as a nation: to make sure that everyone shares in economic prosperity,” he said.
Still, OCC’s bank inspections carried out under the Community Reinvestment Act have all deemed 99 percent of banks satisfactory or outstanding.
Additionally, President Donald Trump’s Justice Department has not sued any financial institution for singling out minorities during the loan application process.
Curry said that, unfortunately, the law itself, which hasn’t been changed in 40 years, is part of the problem.
“The Community Reinvestment Act has aged a lot in 40 years,” Curry said, adding that the Trump administration appears to be weakening the standards, allowing banks to pass the Community Reinvestment Act exam with ease.
Clearly, the lack of anti-discrimination enforcement combined with the banks’ focus on credit history and the historically racist policy of redlining metropolitan maps have all played an important part in making the homeownership gap between blacks and whites explode and become even wider than it was in the Jim Crow era.
It’s impossible to see this reality changing unless the systemic racism that is present in all institutions, financial or governmental, is addressed head-on. But something tells us that the Trump administration isn’t up to the task.
Thumbnail/Banner Credits: Reuters/Neil Hall