Charlotte Observer implies racism behind the “widening minority loan gap”

Posted by: ST on July 13, 2009 at 7:47 pm

Doing the work of Barack Obama and Barney Frank, so they don’t have to:

As the credit spigot dried up in 2008, blacks and Hispanics were more likely to be denied mortgage loans than whites, an Observer analysis of the latest national mortgage data found.

And the rejection gap is growing between whites and minorities, causing some community activists to worry about recurring discrimination in lending.

Nearly one out of two African Americans who sought to buy a single-family home or refinance a loan were denied, compared with about one in four for whites, according to the analysis of top U.S. lenders. Hispanic loan applications were denied nearly as often as those submitted by blacks.

Overall, the country’s 10 biggest lenders, including Charlotte’s big banks, denied nearly one out of every three applications – the highest rate in the past five years – as the financial crisis erupted. The denial rate was higher for refinancings than for home-purchase loans, as homeowners struggled to get loans with better terms amid rising economic woes and falling housing prices.

A key reason for the latest spike in denial rates, experts suggest, is that lenders disproportionately peddled high-interest rate subprime loans to blacks and Hispanics. Now that market is drying up, eliminating a once-easy source of credit. And those who had unaffordable loans are having a tough time refinancing in the recession.

And what was one of the main reasons those lenders were “disproportionately peddling” those subprime loans to blacks and Hispanics? Because politicians – chiefly Democrats – pushed the same idea that the Observer seeks to in this article: that the primary reason that a “disproportionate” amount of white people were getting loans and better interest rates than black people and Hispanics was because of the race factor.

The article gives some obligatory quotes from “experts” who suggest that race is probably not the “only” reason, but the implication is clear that, experts or not, the Observer feels that lenders are unfairly discriminating against black and Hispanic loan-seekers on the basis of their race:

There are myriad reasons why blacks might be denied more than whites, according to experts and government studies. Blacks on average have less wealth and more credit problems, and on average know less about the home-buying process. Discrimination can also occur throughout the lending process. Blacks get less information, less assistance and less favorable terms from mortgage lenders, studies have shown. [Note from ST: What “studies”?]

The mortgage data studied by the Observer doesn’t include information that would definitively show whether lenders are making lending decisions based on race. Banks don’t have to provide information about credit scores or down payments – information that would shed more light on prospective borrowers’ financial circumstances.

The data does include borrower income, one sign of a borrowers’ ability to make loan payments. Taking income into account, however, didn’t erase the disparity. Blacks were denied more often than whites with the same or lower incomes.

So – from that data point (income) alone, the Observer is suggesting – without any other data to back it up (which they admitted in the previous paragraph), that minorities are being discriminated against based on their race in this new era of more thorough scrutiny of credit and financial history. They don’t have the data on income to debt ratios, savings accounts, credit scores, credit history, down payments, etc, but they can base their opinion solely on the basis of income.

Isn’t that nice?

It’s no freaking wonder we’re in the mess we’re in right now. Thanks, in part, to shameless lifetime Democrat politicos like Barney Frank, and liberal newspapers like the Charlotte Observer (who, I should note, had this article plastered on the frontpage/top of the fold in the Sunday edition), unless you’re really paying attention to the fine print of what they’re saying, you won’t get that they are hell bent on trying the same failed, disastrous lending policies of the past in an effort to “level the playing field” again so everyone can have a home, car, whatever they want free of the rountine scrutiny most people get when they go to apply for a loan.

I just signed off on the papers to refinance my house recently, and the process – in my view – was tougher than the original loan process when I first bought it. I had to provide more detailed information than before, and even though I was reasonably sure I was going to be approved for the refi, it was still quite an ordeal. But I was ok with it. People need to have their financial history examined with more than just a quick glance. Where on earth did people get the idea that they should be able to get thousands of dollars in loans and not have to be subjected to an intense scrutiny of their incomes, credit history, etc?

Oh wait

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12 Responses to “Charlotte Observer implies racism behind the “widening minority loan gap””


  1. NC Cop says:

    Every time I think the libs/dems/media cannot go any lower, they surprise even me.

    Dark days.

  2. neomomnc says:

    We just re-fi’d as well and had the same procto exam into the finances, but its all good. Un-freakin-believable that once again its all about race.


  3. Carlos says:

    So what the Observer is telling us is that people who shouldn’t have been able to get loans in the first place are being denied new loans now because they still don’t qualify, but because the rules have changed the banks (supposedly) can’t be accused of racism. Not yet, anyway.

  4. Steve Skubinna says:

    Simple economics dictates that a bank can’t afford to turn away good prospects. Any bank that does is at a disadvantage against one that extends credit to those most likely to repay their loans.

    Lefties don’t believe in simple economics, they believe in feelings and perceptions. If they thought the laws of physics discriminated against women, children, and minorities they’d be clamoring for them to be repealed.

  5. Jo says:

    Hello! Charlotte Observer! Do the names Fannie Mac and Freddie Mae mean anything to you???? But, hey, let’s just throw money at any bad risk–Obama will bale everyone out. Let’s not worry about how we have to pay for it.

  6. 2Hotel9 says:

    So, they are telling us that the Democrats in charge of banking are just as racist as the Democrats in Congress and the White House? Really?

    Long story short, if you don’t qualify for a loan hyou should not get one. Period. That is a fact that the whole Freddie/Fannie program was meant to circumvent, and it did it for 20 years. And then collapsed.

    Quinn’s First Law; Liberalism ALWAYS generates the exact opposite of its stated intent. The only question is did they mean for it to produce this result, or are they just this stupid?

  7. Lorica says:

    or are they just this stupid?

    OHHHHH!!! I have an answer for this one!!! They are just this stupid. In the panic to ignore the fact that Dem meddling in the FMs caused this problem, they are going to repeat the exact same scenarios and we are going to go thru this all over again a few years down the road. That is unless we get rid of these idiot leftists that are in Congress right now. – Lorica

  8. Carlos says:

    “Simple economics dictates that a bank can’t afford to turn away good prospects.”

    The corollary to that, Steve, is that banks can’t afford to accept bad prospects. That is a point lost on libs in general and economic mental amoebas like B. Frank (which, pardon the pun, he’s never been).

  9. Ron Russell says:

    Lenders want to make money, thats what they are in business for. They look at credit scores and other factors in making a loan, not at skin color. This is an old liberal ploy to hollow racism about everything and I for one am sick of hearing it from those who are more concerned about race than I am. These are the new racist in our society.

  10. Carlos says:

    The Democratic Party is the most racist party active in America today. Talk to Thomas Sowell about it if you don’t believe it.

  11. Linda F says:

    In general, minorities have more debt load, often caused by indulging themselves in flashy status items. I teach in an urban school, and you can see the difference in the parking lot – the minorities have newer and more expensive cars (usually leased). Not all – in fact, several of my friends drive modest cars, suitable to their income. And, to be fair, I drive a brand-new Tiburon. It’s not leased, and I can afford the payments, with money to spare.

    Honestly, many people have no idea what they can realistically afford on their income. They overspend on clothing, cell phones, cars, homes, and furniture. When crunch time hits, their carefully constructed house of cards collapses.

    Good rule of thumb – leave yourself enough slack in your budget for emergencies. When jobs are in jeopardy (you’ll know when others at your place of business or similar industries lose theirs), cut back immediately. Everyone has slack in their budget, but many try to hold onto everything, only to lose everything later.

    Final thought – have some savings, pay down your credit cards NOW, and have an emergency plan for when the SHTF.