Personally, I'd say that the ''bankers'' are using the guise of ''helping the people of color'' to actually prey on them. This is a slam dunk setup for another government bailout (''Help us Uncle Sam, so many people defaulted on their loans, nobody could see this coming.'') as well as taking control of lots of property during the next economic downturn.
I've heard this said a lot of times, but this feels more like a slogan than an actual data point to me. Bad statistics are endemic in these sorts of discussions. Is this statistic comparing all Black people to all White people or is this a clear apples-to-apples comparison?
And where do other races like say Asians fit into this here? Apparently, Asians make even more in America than average White people (according to stats I've seen) so do they get better loan terms than White people? And if they do, is it because of their race, or because they make more money? If racism exists, is it affecting Asians in the same way? And if not, why not?
I'm not going to completely dismiss your comment and I want everybody to do well, but I think it merits a much deeper investigation for full understanding.
"WhY cAn'T i GeT fReE fOoD???? This is class discrimination!"
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Feels like the reverse of offering a product only in a certain area should be true.
Prior to the 2008 housing crisis Bush made big push for home-ownership ("ownership society") for everyone, and we saw the subsequent hordes of zero down payment mortgages, etc.
On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout.
That's what I was asking for above. Both the media reporting about this and even their own press release makes this story a bit ambiguous.
> so your insinuation is actually racist.
Normally I'd smirk in being called racist for advocating treating all races equally, but I'd like to simply state that the media reporting on what this program actually is has been extremely confusing. That's why I asked what this program was for up above and pointed out that a program that treated different races differently would be racist.
> On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout.
I view this as penny-wise and pound-foolish thinking. The resulting economic fallout of getting people in homes that they can't afford in a downturn and the resulting bailouts that would happen is much worse for most poor people in the long-run.
Even if open to all people, this is a clear case of disparate impact [1], which runs afoul of the Civil Rights act. But I wouldn't hold my breath for an even application of the law.
1. provide wealth to it's residents 2. fix crime and blight 3. help alleviate housing affordability crisis
Right now, a troubled area might have housing wealth be 1/4 of a nearby affluent area. But generally, this is simply because of crime and bad schools due to the cycle of poverty. If you're able to quickly alleviate the crime and poverty, suddenly that troubled area is basically as desirable for housing as the rest of the area.
Now, usually, this "gentrification" process has happened slower, over decades, and without the corresponding wealth accrual of its current residents. So it doesn't work out for the current residents and the clash between people is much harsher.
But what if all the wealth that was created when a $300k East Oakland home becomes $1m, was equally shared between investment and residents? Could you pay people (give them some type of community job) and/or make sure everyone has housing equity, to break that cycle, stop the crime, so that everyone wins?
It feels doable if tackled on a large scale, what am I missing?
What makes the schools bad, if they receive on-average marginally higher per-pupil funding than mostly-white schools [1]?
[1] on average, both Black and Latinx total per pupil expenditures exceed White total per pupil expenditures by $229.53 and $126.15 - https://journals.sagepub.com/doi/full/10.1177/23328584198724... - I can't find a source now, but the average per-pupil funding is around $20,000, so a difference of $200 is negligible.
If you're surprised that the funding is almost the same, despite schools being funded by property taxes, which are much higher in whiter neighborhoods, that's because you were hoodwinked by the media. Schools are funded by local property taxes and state taxes, with the latter distributed to even-out the funding. For some mysterious reason, the latter funding source receives much less coverage than the former.
Don't get me wrong, money does play an impact, but only when the families have it. When families are wealthier their kids do better even if their school is getting less funding than some of these schools in poor areas.
> The GOP was in the White House when the Housing Bubble was brewed up in 2002–2005. President George W. Bush strongly pushed the finance industry to lend more to nonwhites at his Oct. 15, 2002, White House Conference on Increasing Minority Homeownership. There he told his federal regulators not to worry so much about traditional credit standards regarding down payments and documentation of income because he wanted to see 5.5 million more minority homeowners by 2010. ...
> Angelo Mozilo, CEO of Countrywide Financial...wanted to boost Countrywide’s share of the national mortgage market from 10 percent to 30 percent. He believed he could safely do that by increasing lending to marginal customers, especially Hispanics. ... In 2003, Mozilo, citing Bush’s push for minority home ownership, pledged to a Harvard audience that Countrywide would lend $600 billion to minority and lower-income borrowers by 2010. In 2005, he boosted that promise to one trillion dollars. ... Countrywide went under in 2008. ...
> For example, a 2015 paper by Lin, Liu, and Xie found that in a sample of 18,000 households: The difference in the mortgage delinquency rates between immigrants (15.7%) and natives (4.4%) is significant.
> Similarly, a 2013 paper by Luea, Reichenberger, and Turner revealed 2009 default rates for whites of 3.4 percent, blacks 11.3 percent (3.3 times the white rate), and Hispanics 16 percent (4.7 times the white rate)
> A 2013 paper by Reid featuring data from the fifty largest metro areas for mortgages originated just in 2005 shows that foreclosure rates by 2009 were twice as bad for blacks as whites and almost three times as bad for Hispanics as whites. By 2010, 10.5 percent of Hispanics were in foreclosure versus 4 percent of whites.
> According to Zillow, Hispanic neighborhoods nationally exploded in price by 280 percent from 2000 to 2006 versus about 160 percent for white neighborhoods. Remarkably, by the peak of the Bubble, the median home in a Hispanic neighborhood was worth almost a hundred thousand dollars more than the median home in a white neighborhood. Not surprisingly, the decline in home value from peak to trough was almost twice as severe in Hispanic neighborhoods as in white neighborhoods.
> In summary, immigration was seen as a vast boon to the housing market until it turned out that Hispanics tended not to be able to afford the huge mortgages they had been given. At that point in 2008, housing prices in several high-priced Hispanic-heavy states, such as California and Florida, plummeted, taking down financial institutions like Lehman Brothers, Washington Mutual, and Countrywide Financial. This carnage set off a national recession even in places without a Housing Bubble.
> Santayana famously said, “Those who cannot remember the past are condemned to repeat it.” But what if you haven’t forgotten it because you never had a clue in the first place?
Not to be all Eeyore, but it's a little exhausting to have any post about any race-conscious action get bogged down by commenters who haven't even read the Wikipedia pages for racism and reverse racism. There's an interesting discussion to be had about these kinds of policies:
- housing as infinitely growing store of wealth is probably bad, is it a good idea to get more people on that train? Is it unfair to effectively bar Black and Latino mortgage seekers from the gravy train?
- is it a good idea to do this now, as we're descending further into a housing crisis, or are these markets more liquid than others
- what are other non-credit-score measures of creditworthiness? Is credit even a good idea? Should the government just back things like mortgages, school, and auto loans?
