The Washington Post: Trump’s housing finance plan will make mortgages more expensive, especially for black borrowers, housing groups say

The Washington Post: September, 10 2019: Trump’s housing finance plan will make mortgages more expensive, especially for black borrowers, housing groups say

The Trump administration’s plan to overhaul the country’s housing finance system would make mortgages more expensive for minority borrowers and aspiring homeowners in the South, the Midwest and rural communities, according to fair housing and lending groups.

The plans, unveiled last week by the Treasury and Housing and Urban Development departments, would end government control of Fannie Mae and Freddie Mac, which purchase mortgage loans and package them into securities that they guarantee. The proposal also recommends eliminating the mortgage backers’ affordable housing goals and introducing competition that experts say could further reduce access to credit for low-income communities.

“This plan would interject new entities that would cream the market by seeking to serve the most lucrative regions and borrowers,” such as New York and San Francisco, where home values have skyrocketed, said Nikitra Bailey, executive vice president of the Center for Responsible Lending. “The very communities that need greater access to mortgage credit — communities of color, specifically — would have great difficulty securing credit.”

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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