Screw Credit Cards: Foreclosures Hitting Blacks and Latinos Hardest

The same banks that are sticking it to the taxpayers are giving no relief. And all of it has to do with racial discrimination in loans and real estate. What slays me is that blacks and Latinos are being blamed for the downturn of the economy because of these loans. If banks like Wells Fargo, HSBC, and Bank of America and the now-defunct Washington Mutual (now Chase) hadn’t (1) been in collusion with real estate to redline areas, segregate others and charge higher interest to minorities, (2) turned down those people who could not afford to pay the loans back, and most importantly, (3) started to play with those loans as if they were the Maverick brothers, we wouldn’t have this mess.

The New York Times seems to be late for the train about the subprime loans connection with foreclosures, even in its own backyard:

“My district feels like ground zero,” said City Councilman James Sanders Jr., an African-American who represents hundreds of blocks in Queens […]. “In military terms, we are being pillaged.”

Years ago many banks drew red lines on maps around black neighborhoods and refused to lend; more recently, some banks began taking aim at those neighborhoods for the marketing of subprime loans, say consumer advocates.

Black buyers often enter a separate lending universe: A dozen banks and mortgage companies, almost all of which turned big profits making subprime loans, accounted for half the loans given to the region’s black middle-income borrowers in 2005 and 2006, according to The Times’s analysis. The N.A.A.C.P. has filed a class-action suit against many of the nation’s largest banks, charging that such lending practices amount to reverse redlining.

“This was not only a problem of regulation on the mortgage front, but also a targeted scourge on minority communities,” said Shaun Donovan, the secretary of Housing and Urban Development, in a speech this year at New York University. Roughly 33 percent of the subprime mortgages given out in New York City in 2007, Mr. Donovan said, went to borrowers with credit scores that should have qualified them for conventional prevailing-rate loans.

So why didn’t the banks give the brothers and sisters those conventional loans? This is why I believe racism is still institutional and pervasive. They’ll mortgage the hell out of people of color so that they will fail with such a burden, with the banks picking up the paper and selling the properties to whomever they please. Then they will be confirmed in their view that blacks and Latinos aren’t reliable customers. Because of color? Blacks and Latinos can be responsible homeowners, and build and transfer wealth to their descendants.

Will “CEO of the country” Obama end this kind of thing with banks? The way things are going, it doesn’t look like it, as close as he is with the banks. Obama himself lived in a mixed, though segregated part of Chicago; it was only with the success of his two books that he was able to buy a house in Hyde Park in which to live in high style with his family. He’ll bow to this reality rather than smash it. Which means that blacks and Latinos and other peoples of color must unite and confront the president on this issue, and force him to make changes. Which means that (1) segregation must end in housing, (2) red-lining must end, and (3) blacks and other people of color must not be penalized for wanting a loan to buy a house, other than capacity to repay.

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~ by blksista on May 16, 2009.

One Response to “Screw Credit Cards: Foreclosures Hitting Blacks and Latinos Hardest”

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