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Blacks And Latinos Denied Mortgages At Rates Double Whites

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posted on Feb, 20 2018 @ 09:16 PM
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originally posted by: pavil
a reply to: Edumakated

Thanks for the reply. I just would like to see it proven.

So there is data that could do a true apples to apples comparison?

I would like to see it. I want to hope that their isn't a difference because of someone's race, religion ect.


Fannie Mae & Freddie Mac have the data. 90% of mortgages are run through those entities. All of the information on the 1003 (Mortgage application) would be in their database. Every single piece of information on an individual borrower.

If the Feds were serious, they just request a data dump from Fannie/Freddie so analyses could be done.

I've never seen a truly comprehensive study completed. Almost every study put up by groups like the Center for Responsible Lending and academics have severe methodology issues that could be picked apart by anyone who knows mortgages.

The only thing I can think of where a true apples to apples comparison might result in higher scores for minorities is the channel of origination, broker vs banker vs correspondent. What I mean that some mortgage companies are not as competitive because of who they target as customers. As a result, if minorities or more likely to use certain types of mortgage companies that could result in the data saying their pricing was not as good. It doesn't prove discrimination though.




posted on Feb, 20 2018 @ 09:32 PM
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originally posted by: cenpuppie
a reply to: Edumakated

Your retort is insufficient, because the "i'm doing it and i'm black and i know" is purely hearsay. You got any facts or data to backup your claim because these folks are bring data to the game. Let me guess, it's the cherry picked kind you don't like?

Interactive Redlining Map Zooms In On America's History Of Discrimination

Sorry it's not FOX, but they tend to think like good old conservatives, keeping the status quo.

Here some more, Redlining is Alive and Well—and Evolving. I can go back all the way to the FHA and further for cases of denied mortgages.

But here, the source. Interesting information to say the least, at least for those that wish to know and find out.

Struggle for black and Latino mortgage applicants suggests modern-day redlining.

I'm not playing the political game of smoke and mirrors. We both know what redlining be about.


That PBS interview is a bunch of hogwash. Took all of 10 seconds reading it to see right through it. The case they use in the interview clearly points out that the borrower wasn't qualified, not that there was any discrimination.

Borrower is computer programmer, but apparently was contractor, so she is considered self-employed. Therefore, she has to have at minimum two years of tax returns to qualify. She didn't, so no mortgage.

Then goes on to say her mother agreed to be a co-borrower. Fine. However, her mother didn't make enough to make the DTI acceptable because mother has massive student loans from a PH.D program. Again, DTI is too high based on standard guidelines.

Then the chick gets a salaried job which is fine. However, her credit score dropped 50 points because SHE DIDN"T PAY A BILL. Article doesn't mention what the actual score was... if she had say a 650 and it dropped to a 600. Guess what, she ain't getting a mortgage loan.

There is absolutely zilch in your link that proves discrimination. Just an example of a woman who wanted to buy a home but couldn't because she didn't meet the guidelines.

Do you know who sets most of the guidelines? Fannie Mae and Freddie Mac. Quasi Govt entities. Banks cannot deviate from those guidelines or else they cannot get the loan securitized by Fannie/Freddie.



posted on Feb, 20 2018 @ 09:36 PM
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originally posted by: MysticPearl
a reply to: pavil

Where's the info which includes credit scores and income, which heavily reflects what mortgage or loan one can get?


From my listening of the NPR segment, they say the lenders have fought not to include the Credit score Info to be made available for the study or the public. That and the Debt to income ratios. The segment on the radio had a lot more info.



posted on Feb, 20 2018 @ 09:37 PM
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a reply to: Edumakated

Again thank you for the informative posts on this. You provide good insight into the industry.



posted on Feb, 20 2018 @ 09:46 PM
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originally posted by: cenpuppie
a reply to: Edumakated

Your retort is insufficient, because the "i'm doing it and i'm black and i know" is purely hearsay. You got any facts or data to backup your claim because these folks are bring data to the game. Let me guess, it's the cherry picked kind you don't like?

Interactive Redlining Map Zooms In On America's History Of Discrimination

Sorry it's not FOX, but they tend to think like good old conservatives, keeping the status quo.

Here some more, Redlining is Alive and Well—and Evolving. I can go back all the way to the FHA and further for cases of denied mortgages.

But here, the source. Interesting information to say the least, at least for those that wish to know and find out.

Struggle for black and Latino mortgage applicants suggests modern-day redlining.

I'm not playing the political game of smoke and mirrors. We both know what redlining be about.


I had a client that could barely qualify for a mortgage and he was a multi-millionaire. The guy literally had $6 million in cash in the bank. All verified. However, he could not qualify for a $400,000 mortgage because his debt to income ratio was too high. Underwriting guidelines care about income, not wealth.

It was the most retarded case of mortgage underwriting I've ever seen. Makes no sense. However, the issue is that the guidelines are rigid. A bank cannot make a conventional loan unless the underwriting guidelines are met even if they make no sense. Remember, Fannie/Freddie are basically govt entities. The bureaucracy does not leave room for common sense.

Oh, and he was a white guy.

People often complain about mortgages and the paperwork, but they really just don't understand what goes into getting approved for a mortgage loan. It is a lot of paperwork. There are a lot of guidelines that have to be followed. Many don't make any sense. For example, if you have a lot of student loan debt, you may not qualify for a mortgage even if your loans are deferred. The guidelines require the banks to count a payment for student loans regardless. This trips a lot of people up and they don't really understand why, so they get frustrated and then start yelling about discrimination.



posted on Feb, 20 2018 @ 09:48 PM
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originally posted by: Edumakated


The only thing I can think of where a true apples to apples comparison might result in higher scores for minorities is the channel of origination, broker vs banker vs correspondent. What I mean that some mortgage companies are not as competitive because of who they target as customers. As a result, if minorities or more likely to use certain types of mortgage companies that could result in the data saying their pricing was not as good. It doesn't prove discrimination though.


The NPR segment on the radio said a bank, I forget which one, didn't have to do loans in a certain poorer area of Chicago since it didn't have a branch there that accepted deposits. That seemed like a weird loophole they exploited. The segment made it sound like it was something that happened more than once.

I would think things like that would manipulate lending info for a bank for purposes of analysis. Don't want to be known as the bank that denies a lot of poor people in an area? Arrange it so you don't have to offer loans there by using things like I quoted above.
edit on 20-2-2018 by pavil because: (no reason given)



posted on Feb, 20 2018 @ 10:16 PM
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originally posted by: pavil

originally posted by: Edumakated


The only thing I can think of where a true apples to apples comparison might result in higher scores for minorities is the channel of origination, broker vs banker vs correspondent. What I mean that some mortgage companies are not as competitive because of who they target as customers. As a result, if minorities or more likely to use certain types of mortgage companies that could result in the data saying their pricing was not as good. It doesn't prove discrimination though.


The NPR segment on the radio said a bank, I forget which one, didn't have to do loans in a certain poorer area of Chicago since it didn't have a branch there that accepted deposits. That seemed like a weird loophole they exploited. The segment made it sound like it was something that happened more than once.

I would think things like that would manipulate lending info for a bank for purposes of analysis. Don't want to be known as the bank that denies a lot of poor people in an area? Arrange it so you don't have to offer loans there by using things like I quoted above.


I didn't hear that part, so can't really comment. Not all banks have branches in every neighborhood. In addition, depending on the types of loans they make, it can appear they are redlining. For example, if a bank tends to attract higher income clients, it is makes sense they wouldn't necessarily be making loans in lower income neighborhoods.

One bank I used to do a lot of business was giving out up to $20,000 cash to home buyers as an incentive tp buy in certain zip codes / census tracts. Basically, the Feds told them they weren't lending enough in certain areas, so the only way they could get loans on their books was to offer a crazy incentive to bring in business.

What was crazy is that there were no income restrictions, just that the house had to be in certain areas considered to be under served. I used it for a client of mine (black) who had a million dollar home a block or two over from President Obama's house in Hyde Park. LOL. The census maps they used weren't granular enough so literally there were areas of the Chicago that are considered under served even though there are million dollar homes.



posted on Feb, 20 2018 @ 10:56 PM
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a reply to: Edumakated

Curiously, why would someone with 6 million in the bank want a 400 grand mortgage?

Why have the interest payments when he could buy it outright....



posted on Feb, 20 2018 @ 11:11 PM
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originally posted by: hopenotfeariswhatweneed
a reply to: Edumakated

Curiously, why would someone with 6 million in the bank want a 400 grand mortgage?

Why have the interest payments when he could buy it outright....


You can get a higher return on the money. When you pay off a mortgage, you are essentially paying yourself the rate on the mortgage. However, if you took that money instead of paying it off, you could potentially get a much higher return.

For example, if you have a mortgage at 4% and you come into some cash. Do you pay the mortgage off or do something else with that money? If stocks are returning 15-20%, you are much better off just investing the money instead of paying off the mortgage.

Debt / Leverage is not a bad thing when managed properly.



posted on Feb, 20 2018 @ 11:27 PM
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a reply to: Edumakated

Fair enough, as you say if managed properly .

Thanks for the explanation.....



posted on Feb, 20 2018 @ 11:31 PM
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a reply to: pavil

Can they pay it back?

Simple math.

Think you can get a 10 mil loan for an estate?


You a white guy?

I can't.






posted on Feb, 20 2018 @ 11:41 PM
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originally posted by: Edumakated

originally posted by: hopenotfeariswhatweneed
a reply to: Edumakated

Curiously, why would someone with 6 million in the bank want a 400 grand mortgage?

Why have the interest payments when he could buy it outright....


You can get a higher return on the money. When you pay off a mortgage, you are essentially paying yourself the rate on the mortgage. However, if you took that money instead of paying it off, you could potentially get a much higher return.

For example, if you have a mortgage at 4% and you come into some cash. Do you pay the mortgage off or do something else with that money? If stocks are returning 15-20%, you are much better off just investing the money instead of paying off the mortgage.

Debt / Leverage is not a bad thing when managed properly.



Pay on the principal, If you have extra money.

Keep up the mortg payment. tho. Refinance to a lower % rate if u can.

I bought a house for 30k in CO, had it appraised for twice that, to get some decent vinyl double pane windows.

They can do anything they want and you can bargain with them too.

Don't be an idiot.






posted on Feb, 21 2018 @ 12:11 AM
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I still say that my decision to join the military at a young age was a good choice. The VA loan really helped me out and other benefits just keep on giving.



posted on Feb, 21 2018 @ 12:13 AM
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originally posted by: Khaleesi
a reply to: pavil


I am currently in the process of buying a home. Hopefully we will close next week. The process is excruciating. I had more fun when I had a kidney stone. Here are my insights.

1. Have a credit score of 750 or better. There are several ways to do this, one of which is to get a credit card with a very low maximum credit limit. Never have a balance of more than 50% of the maximum limit. This advice came from our mortgage broker.

2. Keep excellent records. They ask for so much paperwork it is amazing. Tax returns and W2s or 1099s for the last 3 years, one or two months worth of paystubs, several months worth of bank statements (checking and savings), investments such as 401K or 403B.

3. You will need approximately 3% down for an FHA loan on top of closing costs. USDA loans have no down payment but you still need the closing costs and certain areas of the country are not eligible for USDA. Urban areas will not qualify. Your income is also a factor for USDA loans. If you make too much, you will not qualify. We fell into a 'catch 22' on this issue. My partner worked a lot of overtime so we could come up with closing costs, which then put us over the allowable limit for USDA and we had to go FHA and come up with 3% down payment. You will also have to pay for home inspections and property appraisal but those costs should count toward your closing costs.

4. If a family member (or anyone for that matter) 'gifts' you part or all of the money for down payment and/or closing, they will have to provide banking statements proving they have the liquid assets to do so and sign an affidavit stating that they are gifting you the money.

5. If you sell something (like an old car you don't need) you need to provide a bill of sale to prove where the cash came from.

6. If you keep cash on hand for whatever reason (say maybe you had a garage sale and now have a wad of cash) do not deposit it in your bank account. They will want to know where that cash came from. Use it to pay bills, buy groceries, whatever you would normally swipe your debit card for.

There are sooooooooooooo many other things that I'm sure I'm forgetting it's not even funny. When you get started they will do a 'hard pull' on your credit and your score could possibly drop slightly so the higher your credit score the better.




We bought in '11 when the rates were still just about rock bottom. Even with my poor 650 score at the time I earned a 3.5% rate.



posted on Feb, 21 2018 @ 04:19 AM
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Too funny,loan company's make money loaning money,and last I heard your rates were according to credit score,bad credit,bad rate,as usual some liberal trying to create something that doesn't exist



posted on Feb, 21 2018 @ 05:29 AM
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a reply to: pavil

There shouldn't even be graphs indicating this since race plays no part in a credit application or approval.
There is no place for race on any credit application so unless it's a one on one sit down at the bank and then a bank officer noting race on the application the underwriters will never know the race of the applicant because they never see them.

Unless this is a survey of people who applied for a loan and were turned down. Then and only then could they even obtain data on the race of applicants. But then a survey unless it's national still wouldn't reflect a broad spectrum of society. So I'm doubtful of those figures.
Just a note and FYI: net worth includes real estate so homeowners in general will have a higher net worth. And property is collateral.
edit on 2212018 by Sillyolme because: (no reason given)



posted on Feb, 21 2018 @ 05:32 AM
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a reply to: Willtell

Source for your figures?



posted on Feb, 21 2018 @ 05:48 AM
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a reply to: bigfatfurrytexan

I agree. The actual bank isn't racist. However, the people working at the bank could be. That's not to say every case of a black person getting the short end of the stick is due to racism.



posted on Feb, 21 2018 @ 06:19 AM
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originally posted by: Edumakated

originally posted by: hopenotfeariswhatweneed
a reply to: Edumakated

Curiously, why would someone with 6 million in the bank want a 400 grand mortgage?

Why have the interest payments when he could buy it outright....


You can get a higher return on the money. When you pay off a mortgage, you are essentially paying yourself the rate on the mortgage. However, if you took that money instead of paying it off, you could potentially get a much higher return.

For example, if you have a mortgage at 4% and you come into some cash. Do you pay the mortgage off or do something else with that money? If stocks are returning 15-20%, you are much better off just investing the money instead of paying off the mortgage.

Debt / Leverage is not a bad thing when managed properly.


Would you lend money to people that truly believe they can consistently get a 15% annual yield for the cash you are loaning them at 4%? In 2012 I was crying class discrimination over the tight money policies, but not so much today.



posted on Feb, 21 2018 @ 07:01 AM
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a reply to: pavil

Maybe they aren't as qualified for bank loans with the pesky due diligence and all.







 
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