The New York Times: The race-based mortgage penalty

The New York Times, March 7, 2018: The race-based mortgage penalty

As the Trump administration begins to gut federal enforcement of civil rights laws, minority communities that were targets for predatory home loans before the recession have become vulnerable yet again to mortgage discrimination. This time, many banks are simply writing off communities of color and denying them loans at all.

An alarming new study by the Center for Investigative Reporting’s online publication Reveal found that African-Americans and Latinos were far more likely to be denied conventional mortgages than whites even when income, loan size and other factors were taken into account. The study examined 31 million mortgage records and found disturbing evidence in 61 metropolitan areas, including Atlanta, Detroit, Philadelphia, St. Louis and San Antonio. African-Americans faced their worst obstacles in the South — Mobile, Ala.; Greenville, N.C.; and Gainesville, Fla. — and Latinos in Iowa City.

By denying African-American families mortgage credit, the financial industry also denies them the opportunity to accumulate household wealth — part of the reason that white median family net worth is nearly 10 times that of black families. Beyond that, the decision to withhold credit from minority neighborhoods has turned too many of them into hollowed-out areas with high poverty, failing schools, lower property values and a markedly worse quality of life.

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