The American dream of homeownership is something that millions aspire to achieve, a gold standard for success. It has catapulted generations into the middle class, as owners have reaped the rewards of rising real estate prices. But that dream has proved elusive for countless people of color.
“It’s a tax on being Black in this country. It’s a tax on being poor or financially vulnerable,” says Brett Theodos, a senior fellow at the Urban Institute, a nonpartisan research group based in Washington, DC. “At every turn, Blacks are paying more than whites to borrow money or to access money.” But other factors are also at play, which may not at first glance appear linked to race but that are more likely to affect borrowers in Black communities. These include requirements for credit scores and down payments that can be harder for those without good-paying jobs to meet. There is also an absence of local lenders offering competitive rates in communities of color as well as individual lender discretion, where bias has the opportunity to seep in.
“It certainly adds up,” says Steve Ross, an economics professor at the University of Connecticut and co-author of “The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair-Lending Enforcement.” “Many white families have long been accustomed to being able to bring cash to the table or help their children,” says Barry Zigas, a senior fellow at the Consumer Federation of America, a national umbrella group. “Loans with higher down payments have lower interest rates.”
“It’s great they’re serving the community, but it’s bad because they have a lot of market power. We know how monopolies set prices,” says economics professor Steve Ross at the University of Connecticut in Storrs. “This can be extraordinarily abusive.” “I send my people to mortgage bankers who develop a relationship with the client,” adds Williams, a broker with Destiny Realty in Morristown, NJ.The lack of traditional banks in communities of color can also hurt residents’ credit profiles. Poorer neighborhoods tend to be richer in check-cashing services, which can charge higher fees than traditional banks and don’t help residents build the kind of credit that traditional lenders are seeking.
I have a modest retirement income from 35 years of work, several rental properties,a sizable IRA, high 700's low 800's credit score . The only thing the underwriters are interested in is my 'income', not assets thus I cannot qualify for a mortgage. I'm an old white guy.
Pure click bait & a shot of further divisiveness...credit score are a MAJOR part of a mortgage app. If you have a low score the Freddie Mac fees increase so you have to take a higher rate to offset those fees making it a qualified mortgage that can be sold back to Freddie.
Well black Americans workers make more money than other Americans so it makes sense. JK. It stands to reason people who make more money should pay more ( percentage wise ) taxes than other too. No?
Nothing to do with credit risk then🤨 stop making it sounds racist
Clickbait flamer. Credit scores matta
lol, as usual, the media leaves out important details to support their narratives
Its based on fico score and downpayment.
Grow up
I’ve said it once and I’ll say it again. Who the fuck are these MarketWatch clowns, and why the fuck do I continue to follow them?
so why don't they get loans in areas with lower points?
There's a tax on being irresponsible with your finances. IMAGINE THAT.
There are so many factors that go into mortgage rates. AND - You don’t have to provide any race / ethnicity with online mortgage apps. Too many fishing for controversy posts coming from this account.
kuku27 This is out and out discrimination. Must go or stop calling America as Democracy
I would love to see those mortgage applications and see if the only determining factors were color of skin....did anything else about the borrower factor into the rate? For example: credit score, job history, past delinquency, tax liens, slow pays Intentionally misleading
Nothing to see here, except systemic racism
🖕🏾🖕🏾🖕🏾🖕🏾🖕🏾
Why don't they buy in some other community?
13 basis points. Wow.
Race baiters. Shame on you Market Watch. Be honest
Big shocker that
Interest is racist.
Surely its credit score related and just happens that that's what stats of good vs bad credit rating shows 🤯
Oh look, market watch race baiting with propaganda again. What a surprise 😒
Honestly, that's acceptable. Statistically, black neighborhoods are more violent/criminal on average, with less wealth. Besides, banks are private, they can charge whatever they want
Let’s get into Rambo mindset I will give you a war you can’t believe.
Systemic racism
Racism
Your political bias is showing - again 😕
Do you know which variables affect mortgage rates? Skin color is not one of them. This is pandering garbage.
And they are predominately in democratic cities but you conveniently left that part out because you are pushing your racist left-wing agenda!! LiberalismIsAMentalDisorder
Can we have the stats on the credit score instead of the color?
Maybe they should try to pay them back
Aren’t mortgage rates based on credit score? Let’s be transparent with the facts.
Maybe they should pick a different neighborhood. Pretty sure there wouldn't be any cross burning.
Bad score higher rates. Propaganda bullshit!
Are we really this dim come on guys.
Being black and poor strongly correlated in the US. This is about poverty and race.
MW do your homework, credit scores for starters, how stupid can you be. Mortgage rates are predicated on your credit history, the down payment etc. this applies to everyone. Religion, race have nothing to do with your rate.
click bait.
I have a credit score over 800, monitor it regularly through credit karma, and got great rates when I purchased my first home 3.1% 30 year fixed interest rate. The key...credit score! They refuse to interview me before publishing this article...lol! More propaganda I guess!
You sure its not borrowers credit/ work/ income issues that drive up the interest rates. We all know how that game goes whether you are white or black or green or whatever. High risk loans are high interest loans.
MarketWatch is drunk and needs to go home. Absurd...
Top Of The Housing Bubble 💨
If you read the article thoroughly, they admit there are logical reasons for this. Nothing having to do with racism!
It’s called credit risk premium. It’s associated with your credit rating. Did their mortgage applications have a question - “Are you black?” I don’t think so.
why are they accepting these rates
unfollowed this race baiting NBC news owned sh-t rag.
What are the credit scores? Same or different? Income levels? Age of homes? Yes, there are disparities between them, but you are implying facts not presented. Punk amateur blogger. getarealjob
many factors can determine the interest rates, and skin color isn't one of them.
Lol it almost seems like media wants to mind fuck u into political correctness.
This article is straight sh*t. Tons of factors are attributed to a rate and color is not one of them.
Article says people of color in black communities typically have lower credit scores and less cash. Race has nothing to do with it. It’s all about the Benjamin’s . Riskier loan = higher interest rate . What don’t you get ?
This title is such bullshit. Lower credit scores, lower down payments, higher risks with lower paying jobs, why should someone with those criteria get the same as anyone with better credentials?
13 basis points! What, that is a statistical rounding error😂
Do you even know what 13 basis points are?
Shit credit
This is so fucking stupid. I’m sure their skin color not credit history or debt to income were the reasons 🙄
Finance racism.
What are their credit scores ? Boom!
Trump approved!