Why a housing scheme founded in racism is making a resurgence today
- Thread starter SummerMadness
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Yes, our bank has a program to help people gain credit or improve their poor credit. The young lady we have living with us is going to use that service to help her. We are hoping by the time she has a good down payment for a car in her savings account this program will help her get the loan.
It's a lot harder to gain credit for anyone compared to the past. They loosened things up for a while, and got burned...and then tightened them back up again.
I have found that people really don't know much about credit. I have done plenty of credit work, and it's amazing what people don't understand. Believe me its not a color thing either. People blow off creditors all the time, or they make payments when they want too. They just don't get it.
That normally can reach into the area of even getting a bank account. It's harder to get those too now days. Part of that is the Patriot act in which you must prove who you are. Yet, if you have had problems with one bank? You will have to prove that you resolved that issue before the next bank will open the account. That part seems to be the bigger issue compared to the Patriot act.
I have found that ignorance is the biggest factor towards banking or credit. People truly have no clue.
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ChristsSoldier115
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I had zero credit up until I was 30. I paid everything directly. My credit has taken a crap lately because it was good and I co-sogiend with a family member who turned out to be unreliable and it destroyed it. But I dislike the process of credit.. I have to be in debt to prove I am trustworthy with money.. makes no sense to me. I hate having debts do go out of my way to eliminate them.
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Even when controlling for income, African Americans and Hispanics received a higher proportion of subprime lending, so it's not simply poor credit to blame. They were targeted disproportionately more, in the same way they were targets in the middle of the 20th century.
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TheBear
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That's because everything boils down to racism. Or, it could be that a larger percentage of black people living in the victimhood mindset and not taking personal responsibility for their own lives, always blaming others for their circumstances, enslaved to government handouts, and thinking more along the lines of 'group' rather than 'individual', have poor credit as a result. Just a thought.
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Why a business founded in making a profit is making a resurgence today. There, fixed it for you.
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To some people, yes. At the time I write this six out of the top ten current threads are about racism, five started by the same member. All we need is a bunch of lego guys singing "everything is racist!"
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Sounds like you didn't read anything, those tired points have been demonstrated as untrue. I'm not surprised though, some would rather continue to believe lies and falsehoods (ha, including government handouts when discussing home buyers goes back to a repetitive racist narrative that does not even apply to the subject).
You're more than welcome to provide the data and survey information that demonstrate the practice was non-discriminatory.
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When I worked in credit we never knew what race, color, etc they customer's were.
Those land contracts are legal, and normally used when a person can't get a conventional loan. The article that was linked to about the land contracts - at least the way I read it - turned out that the individuals couldn't afford the land contract either. I mean one of the quotes from a gentleman was he couldn't afford the payments, because he put in plumbing that month. Sadly, many people even with a conventional loan run into that. When renting you can start the eviction within a month of non payment, and in this case it can be started at month 4 for foreclosure. I have a feeling it was more than just plumbing for the one month of rent, because he had three more to make it up. These Detroit houses aren't move in ready either. You have to live in one place while you fix up the second to make it livable. That would be HARD for anyone!
Land contracts were used more in the 1970's when interest rates were through the ROOF, and it was cheaper to do it this way compared to conventional. They have been around forever. You also had a balloon payment at the end of the land contract, and within those years of paying on that contract you find ways of establishing credit in order to get a loan for that last part.
There was another article that stated they couldn't get loans because banks were not in their neighborhood. You don't need that anymore. We did ours with a bank that is two states away over the internet, email, and phone calls - and they never saw our faces. Thankfully banking in the neighborhood in that way isn't so much a barrier anymore.
Besides, if you are speaking about more low income neighborhoods? You don't want many banks, because banks don't pay into the sales tax base that neighborhood needs and wants. You can rent a space to a business that has goods that are taxed, because banks aren't charged or contribute to sales tax - which is needed by the area. NOT having banks in the area isn't always a bad thing if you need that tax base - which most communities do.
Those land contracts are legal, and normally used when a person can't get a conventional loan. The article that was linked to about the land contracts - at least the way I read it - turned out that the individuals couldn't afford the land contract either. I mean one of the quotes from a gentleman was he couldn't afford the payments, because he put in plumbing that month. Sadly, many people even with a conventional loan run into that. When renting you can start the eviction within a month of non payment, and in this case it can be started at month 4 for foreclosure. I have a feeling it was more than just plumbing for the one month of rent, because he had three more to make it up. These Detroit houses aren't move in ready either. You have to live in one place while you fix up the second to make it livable. That would be HARD for anyone!
Land contracts were used more in the 1970's when interest rates were through the ROOF, and it was cheaper to do it this way compared to conventional. They have been around forever. You also had a balloon payment at the end of the land contract, and within those years of paying on that contract you find ways of establishing credit in order to get a loan for that last part.
There was another article that stated they couldn't get loans because banks were not in their neighborhood. You don't need that anymore. We did ours with a bank that is two states away over the internet, email, and phone calls - and they never saw our faces. Thankfully banking in the neighborhood in that way isn't so much a barrier anymore.
Besides, if you are speaking about more low income neighborhoods? You don't want many banks, because banks don't pay into the sales tax base that neighborhood needs and wants. You can rent a space to a business that has goods that are taxed, because banks aren't charged or contribute to sales tax - which is needed by the area. NOT having banks in the area isn't always a bad thing if you need that tax base - which most communities do.
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But in many cases the person could receive a conventional loan, but they were not afforded the same opportunity. There is bias in the market.
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If two customers come in with the same credit worthiness and you give them a different level of service, then you're not treating them equitably. In this case, a disproportionate number of African American home buyers were offered a more risky loan when they should have received a more secure loan.
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You lost me there. If you have people with the same credit worthiness, and they went to (I will pick a name off a TV commercial for my example) Quicken Loans. They fill out the same forms, supply the same paperwork via email, a computer system verifies the information, are mailed the same forms to be signed, etc. The computer and the internal workings of the network don't know if they are AA buyers or not.
They are also applying to same program that everyone uses over the internet. They have the standard form that everyone uses on the website itself. Although it may differ from state to state due to laws, etc.
So, how do we determine what is more risky than another?
The two loans spoken about in the articles are different types of loans, and are treated differently because they are different. You can't compare land contracts to a conventional loan. Just like you can't compare a conventional loan for a home to a car loan. Cars loans these days they will give to almost anyone, but I guess that is because you are NOT speaking about the same amount of money and of course other factors - like its investment and tends NOT to depreciate.
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TheBear
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Wrong. The only color the market sees is green. Additionally, there are laws in place prohibiting such practices. A lending institution can get into serious trouble if it makes lending decisions based on race.
You really got to get past this 'racism' theme you seem to be stuck in, and accept reality. Everyone's entitled to their own opinions, but not their own facts. Look at all the facts and stop making unfounded and sweeping generalizations. Then again, this might be asking too much of an SJW.
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TheBear
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It has to do with income, credit history, collateral, etc. And it's the financial institutions who bear the 'risk', not the other way around. And again, there are laws in place. And, what do you mean "a more secure loan"? If the home owner defaults on payments, what should happen? You want the government to step in and pay the mortgage?
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