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Doberman23
Veteran Poster
Username: Doberman23
Post Number: 904
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 12:59 pm: | 
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By Jason Szep 2 hours, 7 minutes ago
BOSTON (Reuters) - Barbara Anderson and her husband know racism. Among the first blacks to move into an Ohio neighborhood 25 years ago, she watched in horror as white neighbors burned her garage nearly to the ground.
Fast-forward to 2007 and Anderson talks of a different sort of discrimination: brokers of subprime mortgages who prey on borrowers with weak credit histories like the Andersons, who raised eight children in Cleveland's Slavic Village district.
"These subprime lenders target you to take you through disaster," said Anderson, 59, who filed for bankruptcy after a legal tussle with a subprime lender, a "nightmare" that she said ended four years ago when her home was nearly foreclosed.
"I was fortunate. I went to another bank that decided to give me a chance with a new loan. The day that happened my headache stopped, my blood pressure lowered, my sick stomach went away, and it was because now I could see some daylight."
Across the United States, blacks and Hispanics are more likely to get a high-cost, subprime mortgage when buying a home than whites, a major factor in a wave of foreclosures in poor, often black neighborhoods nationwide as a housing slowdown puts millions of "subprime" borrowers at risk of default.
Even more troubling, real-estate industry analysts say, is an alarming proportion of blacks and Hispanics who received subprime loans by predatory lenders even when their credit picture was good enough to deserve a cheaper loan.
In six major U.S. cities, black borrowers were 3.8 times more likely than whites to receive a higher-cost home loan, and Hispanic borrowers were 3.6 times more likely, according to a study released this month by a group of fair housing agencies.
"Blacks and Latinos have lower incomes and less wealth, less steady employment and lower credit ratings, so a completely neutral and fair credit-rating system would still give a higher percentage of subprime loans to minorities," said Jim Campen, a University of Massachusetts economist who contributed to the study.
"But the problem is exacerbated by a financial system which isn't fair," he said.
In greater Boston, 71 percent of blacks earning above $153,000 in 2005 took out mortgages with high interest rates, compared to just 9.4 percent of whites, while about 70 percent of black and Hispanic borrowers with incomes between $92,000 and $152,000 received high-interest rate home loans, compared to 17 percent for whites, according to his research.
"It's a huge disparity," he said. High-cost mortgages usually have interest rates at least 3 percentage points above conventional mortgages.
PREDATORY LENDERS
Predatory lenders moved aggressively into the subprime mortgage market as a housing price boom between 2000 and 2005 cut the risk of lending to people with damaged credit ratings.
Many focused on minority neighborhoods in slick sales pitches that offered the American dream: home ownership with no money down and little worry about poor credit.
"The predatory lenders reach out to those who don't really know, people with a lack of education," said Cassandra Hedges, a black 37-year-old mother of two fighting to stave off foreclosure of the Ohio home she bought three years ago.
"One of the first things my broker asked me was 'How do you know you are ready to buy a house. Have you done any research?' We said 'No'. At that point I think he realized 'Okay I got some people that don't know what the heck they are doing'."
She and her husband Andre now face a 10.75 percent interest rate on an adjustable-rate mortgage and monthly payments of $1,600 -- more than double the $650 she told her broker she could afford. Foreclosure looms after she missed a payment.
"If you're white they overlook the fact that your credit score is a little too low or you have one extra late payment," said Barbara Rice, a community organizer at the Massachusetts Affordable Housing Alliance, a nonprofit advocacy group.
Rice, who is white, and a colleague who is black took part in an experiment in Massachusetts last year to test the racial bias of mortgage brokers. They both posed as prospective home buyers in a separate meetings with several brokers.
Rice presented a worse credit rating and lower income than her black colleague to brokers but received better treatment.
"I was given more information," she said.
Many traditional banks do not run branches in poor minority neighborhoods, creating a vacuum often filled by predatory lenders and unscrupulous brokers, said Stephen Ross, a University of Connecticut economist who studies lending.
When the property market was strong, those brokers could tell borrowers that rising prices meant they could easily remortgage their properties to keep up with payments. But since the market peaked in 2005, millions are struggling to repay those loans. This year, some 1.5 million homeowners will face foreclosure, research firm RealtyTrac estimates.
The U.S. Mortgage Bankers Association said disparities by race alone in home loans do not prove unlawful discrimination but may indicate a need for closer scrutiny. |
Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 7916
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 01:16 pm: |
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Just another situation that prompts a little voice in my head to ask why do blacks always get the shaft? Is it all part of a grand plan, the outcome of which eludes us?? The new millennium was supposed to usher in the Age Of Acquarius, a time of peace and enlightenment and prosperity. I'm still waiting... |
Chrishayden
AALBC .com Platinum Poster
Username: Chrishayden
Post Number: 3923
Registered: 03-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 01:43 pm: |
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Just another situation that prompts a little voice in my head to ask why do blacks always get the shaft? Is it all part of a grand plan, the outcome of which eludes us?? The new millennium was supposed to usher in the Age Of Acquarius, a time of peace and enlightenment and prosperity. I'm still waiting...
<they have decided that we take the weight--
They been saying for about two years now that this housing bubble would burst--this kind of thing is periodical in this system--
Read this book, "The Devil Take The Hindmost" about this kind of stuff. |
Abm
"Cyniquian" Level Poster
Username: Abm
Post Number: 8950
Registered: 04-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 02:01 pm: |
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Why sign-on to mortgage that requires you to pay $1,600/month when you KNOW you can only afford to pay $650?
I mean, some of this truly IS unfair, biases and predatory lending.
And some of this is Black foks biting off more than they KNOW (or SHOULD know) they can NOT effectively chew and swallow. |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 4100
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 02:08 pm: |
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As long as we rely on the white man for all our financial services needs we're going to continue getting screwed.
We need to start building our own homes and financing our own mortgages. Among other things.
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Chrishayden
AALBC .com Platinum Poster
Username: Chrishayden
Post Number: 3924
Registered: 03-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 02:10 pm: |
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A chance to get the American dream--with this, redlining, blockbusting, insurance scams and emminent domain I'm thinking buying a home is not such a good idea. |
Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 7920
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 02:33 pm: |
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I can't see any reason for a single person to buy a house as opposed to a condo or even opting for apartment dwelling. A house can be more trouble than its worth because it requires so much upkeep. |
Doberman23
Veteran Poster
Username: Doberman23
Post Number: 905
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 02:52 pm: |
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cynique, your right about that everytime i turn around i have to do something new to my crib. i wish i had bought a condo, but this neighborhood and house is really nice. i got myself a roommate, this summer though so i won't be bothered with doing outside work or paying this kid a few houses down $20 a week to cut my shiznit. i see why people really have kids ... i can't wait until my nieces and nephew are older. |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 4104
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 03:26 pm: |
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I love owning my house. It's roomy, private, quiet, secure (with wrought-iron burglar bars and six foot rock wall and gates), I have a yard and patio, my car has a garage, and it's mine to paint and decorate as I please. And there's hardly any maintenance since it's zero-scaped (I'm in the desert) plus it's a great investment. I prefer it over apartment living any day.
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Abm
"Cyniquian" Level Poster
Username: Abm
Post Number: 8953
Registered: 04-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Tuesday, March 20, 2007 - 03:40 pm: |
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If I didn't have wife and kids, there's nowayindeeHELL I'd EVER own a single-family style home.
Not EVER. |
Toubobie
Regular Poster
Username: Toubobie
Post Number: 240
Registered: 08-2005
Rating: N/A
Votes: 0 (Vote!) | | Posted on Saturday, March 24, 2007 - 09:56 am: |
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unless you are wealthy and/ or have children... owning a home is not worth it.
it becomes too much of a financial burden and the associated responsibilites suck the very life out of you. i know many single home owners who are consumed and solely driven by their property... if they lose their job or some other life altering event occurs... holy sh*t! |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 4152
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Saturday, March 24, 2007 - 12:39 pm: |
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And the same thing will happen to them if they reside in an apartment, except they'll get kicked out of an apartment for nonpayment of rent a whole lot faster than if they fall behind on their house payments. If people fall behind on their mortgage they have more time to catch up and they can make arrangements or refinance. They can't do shit if they live in an apartment, because as soon as the rent is late the landlord can come in and confiscate personal property, lock them out of their place or both. And evict them. It's kind of difficult catching up on rent payments without a place to stay. Think about it.
People can still find decent homes with manageable monthly payments around the same as apartment rent. And when they pay their mortgage payment they are building equity.
Apartment rent is money down the drain.
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Toubobie
Regular Poster
Username: Toubobie
Post Number: 246
Registered: 08-2005
Rating: N/A
Votes: 0 (Vote!) | | Posted on Sunday, March 25, 2007 - 06:42 am: |
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indeed, one builds equity in their homes... this all depends, however, on how their mortgages are structured. if you get screwed by your intrest rate, you come out of the deal 'up-sidedown' and in the red.
millionaires, like you, Mzerk, wouldn't have this problem, but there are real estate sharks out there, preying on unsuspecting middle to lower class home buyers (and home owners, if refinancing) who do not understand how interest rates and property taxes work in their respective states. if you go into an investment like buying a home, be sure to educate yourself, and know what pitfalls may lie ahead.
Renters need not think so much about these things and other matters pertaining to land usage, property rights, and insurance. More than likely, there are more practical investments out there for single folk. Build the portfolio, increase the passive income, buy the home AND the land, outright. NO mortgage - if you're going to own it, OWN it.
In any case, stay on top of your game in this volatile market. |
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