An anononymous poster asked me how we can provide equity in the mortgage lending business without affirmative action. The question is akin to asking how often one beats his wife, as it assumes guilt on the part of the lending industry. I don't think that there is widespread or systemic racial discrimination in mortgage lending. Here is why.
First, we have to understand why any individual investor or any lending institution would lend money to an individual. They do it to earn money through interest payments paid by people who do not default on their loans.
Now let us suppose that anonymous is correct. Let us say that there are a million creditworthy black people who have been denied loans simply because they are black.
This means that there are a million money making opportunities out there for investors. There are a million customers out there waiting for loans, but every single investor (including wealthy black investors) or lending institution has decided to forgo the opportunity to make money off of creditworthy black people because they all agree that it is more important to harm black people than it is to make money.
It is far more plausible that the people who are denied loans, whatever their color, are denied because they are credit risks. But some persist in believing that there is widespread racial discrimination in lending. I say that if you are willing to believe that lenders prefer harming blacks to making money, you might as well believe in the Tooth Fairy.
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your spin on my mortgage lending discrimination statement is inaccurate. Not once did i ever say people of color are being denied loans. Where did that come from? Again, that is avoiding the real issue about the mortgage lending discrimination i mentioned. Credit worthy individuals of color, based on industry stats, and compared to other individuals of the same credit worthiness show they are offered inferior loan rates and products. You are familiar with the term predatory lending, that term was coined not because someone was thinking of a new word to invent, but becasue these practices are a reality. How many Pay Day Loan stores do you see in Wind Point? Do you think there located throughout the hood for a reason?
Also, you may think that this problem is a fantasy. But mortgage industry stats prove otherwise. Just because you "think" it doesn't exist, doesn't mean that it doesn't exist. That's like me saying, I don't think a novelty gift shop that sells east indian and african crafts, jewelry and clothes exists in downtown Racine, obviously the facts prove my statement to be completely false.
The same principles apply anon. If creditworthy blacks are being charged higher rates for loans than whites with the same credentials, this would allow opportunity for other lenders to gain their business by offering lower rates. If inner city people are being charged, on average, higher percentages on loans, might it be because they are, on average, greater credit risks? The tooth fairy analogy still applies. And if you don't believe that my business exists downtown, then you have no ability to reach conclusions based on evidence. What would be the point in conversing with someone so clueless? Really anon, you can do better.
Can you give me the jist of these mortgage industry stats that you are reffering to?
Tooth fairy analogy does not apply. Why are credit worthy people of color having to jump through more hoops, essentially do more work, in order to get a decent rate and standard loan products, the same products that their white counterparts get, with less hoops. Do creditworthy whites have to deal with these additional hoops? Its probably safe to say that in most instances, they don't.
Higher credit risks in the hood you say? No offense, but that is baseless nonsense. Are they credit risks based on where they live, or their credit scores? Most people in the central city have low credit scores? Another stereotype. Thats another stereotype which contributes to the thought processes behind these discriminatory practices, and continued proliferation of predatory establishments that only do business within the central city, no where else, like pawn shops. Seen any pawn shops in Wind Point? That's like me saying, because you live in the suburbs, you're probably a card carrying member of the KKK, because most KKK members live in the suburbs.
Ridiculous isn't it?
You missed my point completely about your business, the point is just because anyone "thinks" it doesn't exist, doesn't mean it doesn't exist.
Glad you asked about these stats, good to see you truly want to be informed. See for yourself. Read below.
I'm sure you are aware of Bank Rate, very reputable and accurate source for financial information...
http://www.bankrate.com/brm/news/mortgages/20060601b1.asp
This one is really good info as well
http://www.responsiblelending.org/issues/mortgage/reports/page.jsp?itemID=29371010
silence?....interesting.
Well anon, I was unable to find any reference to racial discrimination in the links you sent me. That could well be that I am simply inept with computers. But lets just say that there are stats out there that say that blacks get denied mortgages 50% more often than whites, for example. My guess is that you would take this as proof of racial discrimination. It is not, though it could be. But there are other variables besides race (I would suggest that race is not normally one of the variables)that correlate with loan denials, namely ones ability to repay a loan. In other words, blacks, on average, may well have less colateral, less income etc... than the people who are getting the loans. Statistics on loan denials, absent other info, are useless. Otherwise, I could claim discrimination within any organization based on statistics alone. The NBA, for example is among the most biggoted of organizations. They discriminate against whites, Asians, Mexicans, women, Jews, Hindus, Arabs, children, the elderly, the handicapped, the obese, short people and so on. One could use statistics to "prove" discrimination wherever one felt like it. But I strongly suspect that the NBA merely discriminates against everyone who is not a superb basketball player because it is not in their interest to discriminate on any other basis. Likewise, the lending industry will only discriminate against those who pose an unacceptable risk of default, regardless of color, ethnicity, gender, height, weight etc...
I'm laughing over here at how we go back and forth about every single issue we've discussed in these blogs, i've never come across someone who i never agree with on anything (except my wife, of course). We'd make great political foes. Too bad neither one of us are running for anything,...(yet at least). First time for everything i guess, but again, we're not talking about denial of mortgages or comparing credit worthiness here. We're comparing apples to apples, not apples to oranges.
But i'm curious as to why do these topics scare people away from talking about them publicly? Everything aside, what's your honest assessment of that phenomenon? (not talking about these issues that is)
well anon, look at what happens when a few brave black people express opinions that differ from the majority liberal positions held by black leaders. They are villified as sell outs, Uncle Toms etc... When a white person speaks out, they risk the "racist" label. The tendencies of liberals to label their opponents with unsubstantiated attitudes (racist, sexist, homophobic etc...) have the effect of silencing their opposition. Not many people are willing to speak out publicly if they know that they are going to be villified, smeared, etc... so many simply hold their positions privately. In any case, it is not healthy. Liberals should stop with the name calling, and conservatives need to grow a spine and learn to combat the criticism. And with the web, conservatives have an avenue that wasn't available to them previously. Take my case, for example. I write just as well as most at the JT, I am able to offer interesting and controversial commentary, but the JT took a pass on me, I think because of my ideology. That is OK, I can write here just as well. The liberal news monopoly is coming to an end, and we will all be better off for it. And anon, what are you doing on the computer? You should be getting ready for the first ever FreeRacine social gathering tonight, 7pm at the JavaVino.
anon, if you always disagree with me and you always disagree with your wife, then your wife will always agree with me. Smart woman. You should keep her.
you always disagree with me as well and offer blanket conversative views, but thats ok, thats you. I say, if you're a racist, homophobic, or any other "-ist" own up to it and stop pretending. You can run from other people but you can't run from yourself.
what are you saying anon? Do you think that all conservatives are racists and homophobes? It is hard to tell what you meant. Please explain.
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