WaPo: White homeowners recovering from the recession but black homeowners are not

[bigtree]

Keith Boykin ?@keithboykin 29m29 minutes ago
Washington Post: White homeowners recovering from the recession but black homeowners are not. http://www.washingtonpost.com/sf/investigative/2015/01/24/the-american-dream-shatters-in-prince-georges-county/?hpid=z1 …


____The recession and tepid recovery have erased two decades of African American wealth gains. Nationally, the net worth of the typical African American family declined by one-third between 2010 and 2013, according to a Washington Post analysis of the Federal Reserve’s Survey of Consumer Finances, a drop far greater than that of whites or Hispanics.

The top half of African American families — the core of the middle class — is left with less than half of the typical wealth they possessed in 2007. The wealth of similarly situated whites declined by just 14?percent.

Overall, the survey found, the typical African American family was left with about eight cents for every dollar of wealth held by whites.

Not only is African American wealth down, but the chances of a quick comeback seem bleak. Just over a decade ago, homeownership — the single biggest engine of wealth creation for most Americans — reached a historic high for African Americans, nearly 50?percent. Now the black homeownership rate has dipped under 43?percent, and the homeownership gap separating blacks and whites is at levels not seen in a century, according to Boston University researcher Robert A. Margo.

...According to the Fed survey, 1 in 7 owed more on their mortgages than their homes were worth in 2013, a sharp increase from 2010.

By comparison, just 1 in 18 white homeowners was underwater, an improvement from 2010. Also, African Americans own fewer businesses, stocks and other equities than whites — assets that have all recovered sharply since the recession.


read more: http://www.washingtonpost.com/sf/investigative/2015/01/24/the-american-dream-shatters-in-prince-georges-county/?hpid=z1


Distribution of wealth
The greatest differences in black and white wealth are among the richest and poorest families



report: Survey of Consumer Finances - Federal Reserve System

[NYC_SKP]

1. Could it be that predatory lenders preyed more on homebuyers of color?

This whole mortgage mess was fueled by a gross lack of regulation and shady sales practices.

I suspect that a lot of the victims of these practices were lied to and that many were minorities.

Whatever the causes, this is terrible news for all of us who hope for a better society with a stronger middle and working class.

[bigtree]

2. what strikes me is that legislators have yet to come up with a solution for these disparities

...even though people like myself have been highlighting them for decades.

One of the things I've been advocating for years is a special focus on the particular concerns and problems facing the black community, facing black families. What we always end up with is this insistence that a rising economy raises all boats, when the evidence for decades is that there are issues (like the one you've pointed to) which are especially endemic to black Americans.

[JonLP24]

5. You have one party that is basically bought & paid for a portion of the other that is

Union busting, slashing safety nets, raise taxes giving tax breaks for the rich. Also give 'em a subsidy while they're at it.

African-Americans collectively have been in a recession since the Reagan administration. Racism certainly is clearly part of it, many racists would appear baffled that racial profiling or discrimination could even exist without somehow realizing there are police officers & employers that feel the very same way they do. Continued poverty cycles is helpful in lowering the bargaining power (since they can already throw away felony conviction applications) but certainly there is a concentrated effort to make the poor, poorer but there a limits they would go and get away when it comes to race & even Americans. I've seen first hand what private defense contractors does with slave labor to do all the grunt work in military bases, even perform high risk tasks such as drive in military convoys for about $300 a month. Also take their passports when they arrive & put them in the very uncomfortable living situations which was much less than what was provided for military personal. In fact, they were constantly "watched" by the military and private security.

It isn't that they haven't figured out a way, they're unconcerned for a better way. Just for a powerful few. I think 400 billionaires collectively has as much or more wealth than 37 million African-Americans

[LeftyMom]

4. I'm sure they did. I seem to recall the worst offenders advertised in ways that suggested who they

were targeting.

[JonLP24]

6. Wells Fargo & "ghetto loans"

At one point she was the top salesperson selling sub-prime mortgages at Wells Fargo. One year she made $700,000 in salary and commissions by just selling the sub-primes. Now that she's left the bank she and another former Wells Fargo mortgage officer are spilling the beans by alleging reverse redlining on the part of their former employer.

"Wells Fargo," Jacobson told CNN's Carol Costello, "set up a whole platform called ‘emerging markets’ that was geared to the African American." She says the bank's goal was to sell them sub-prime mortgages, which are much more profitable to the banks than prime rate mortgages. But the problem, says Jacobson, was that Wells was so single-minded about this that "we had products where you didn't have to disclose income…and they would loan up to 95% (of the mortgage total)." When temporary low teaser rates were replaced with much higher rates after two years, she says, the defaults mounted.

<snip>

Paschal, who is African American, claims black loan officers were hired to gain the trust of the black community in order to sell them on high interest loans. He also describes how he often heard employees – whose job it was to target African Americans for subprime loans – jokingly refer to doling out “ghetto loans” to people with “bad credit.”

Baltimore Mayor Sheila Dixon says the effect of reverse redlining is that so many people defaulted from the Wells Fargo loans that her city is forced to spend millions of dollars to protect and clean the empty homes. The city also says it has lost tax revenues from declining property values. Dixon told CNN the city wants Wells Fargo to pay the city "so we can take these communities that have been devastated as a result of these foreclosures to stabilize those neighborhoods."

http://am.blogs.cnn.com/2009/06/11/reverse-redlining/

Wells Fargo Settles Discriminatory Lending Suit, Pays Tennessee Towns Memphis, Shelby $432 Million

May 29 (Reuters) - Wells Fargo & Co has promised $432.5 million in lending and other payments to end a lawsuit accusing the bank of discriminatory lending practices in Memphis, Tennessee.

The fourth-largest bank by assets has set a five-year lending goal in Memphis and surrounding Shelby County of $425 million, including $125 million for home purchases for low and moderate income borrowers, the bank said in a statement on Tuesday.

<snip>

The bank said in a securities filing on May 8 that it believes the charges should not be brought and that it is seeking to show the department that it is in compliance with fair lending laws. [ID: nL1E8G83NB]

Bank of America Corp's Countrywide Financial unit agreed in December to pay a record $335 million to settle similar charges.

The Justice Department accused Countrywide of charging blacks and Hispanics higher interest rates and fees than whites, and steering minorities to more expensive subprime loans even though they were qualified for traditional mortgage rates. Countrywide denied the department's allegations.

http://www.huffingtonpost.com/2012/05/29/wells-fargo-discriminatory-lending_n_1554533.html

[2naSalit]

3. I'm shocked

Shocked I tell you!