Black borrowers in Richmond are less likely to be approved for home loans and refinancing than white applicants regardless of their income levels, according to a study by fair-housing advocates.
The effect is a continuation of the “redlining” that explicitly denied loans to minorities in the 20th century, according to Housing Opportunities Made Equal of Virginia.
“Certainly lenders and banks tell you money is all the same color and they’re an equal opportunity lender, but when you get down to it, you have individuals who are underwriting loans who have biases,” said Brian Koziol, the nonprofit organization’s director of research and the report’s author.
The group’s study found that between 2010 and 2013, the most recent year for which mortgage data is available, 13.7 percent of white borrowers had loan applications denied while black applicants experienced a 34.6 percent denial rate.
The report found that Hispanic residents also faced higher denial rates than white residents, but overall were granted loans more frequently than black borrowers.
Koziol said that a lenders’ willingness to finance home purchases directly corresponded to a neighborhood’s racial makeup.
The study found that for each percentage point increase in the minority population of a census tract, 12.5 fewer mortgages would be made.
The neighborhoods impacted are the same ones historically excluded for lending through redlining, and more recently, targeted for subprime loans, Koziol said.
While those neighborhoods have disproportionately high poverty rates, a borrower’s income doesn’t account for the difference: The report found a 9.9 point disparity in loan approval rates among black and white low-income applicants and a 27.5 point disparity among black and white upper-income borrowers.
That’s the best part, really. The higher your income as a black potential mortgage borrower, the larger the disparity in actually being approved for a mortgage. Because a black family making good money is automatically more suspect, you see. They could afford the house in the nicer white neighborhood, but why would the bank want to lower the property value of the houses of their other mortgage clients? Mortgage loan decisions aren’t made by banks, they’re made by people.
Redlining has been going on for decades, folks. It’s been going on not just in the South but all over the country, in red states and blue states and liberal enclaves and conservative strongholds.
And if you don’t think this isn’t happening in just about every decently sized US city in America right now, with the rush to segregate schools and neighborhoods through gentrification and exurban gated communities where “we don’t think it’s a good idea that you move in to this neighborhood, you see”, well I have some property for sale for you that you mysteriously can’t get a mortgage on.
Very little has changed in the last few decades, social media and instant news just makes it more visible.