Politics and Black Mortgages
How woke is your mortgage broker?
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Believe it or not, there are still cities in America where it is more difficult, if not impossible, for Black People and other minorities to get a mortgage.
In an article titled, “Cities Where Black Homebuyers are Least Likely to get a Mortgage,” by Tendayi Kapfidze, we found Sacramento to be number 5 on the list.¹
To be fair, the author did not say or use data that explicitly alleged discrimination. The only criteria for getting on the list was the percentage of loans that were declined. In Sacramento’s case, approximately 20 percent of all loans were denied. But 39.5 percent of all Black Mortgages were denied.
See the complete list here.²
Up until 1968, there was widespread use of a tactic called “Redlining” in American cities and neighborhoods. The term refers to, “A discriminatory practice by which banks, insurance companies, and others, refuse or limit loans, mortgages, insurance, etc., within specific geographic areas, especially inner-city neighborhoods.”
It was based on the belief that certain “hoods”, neighborhoods that were predominantly made up of African Americans, as well as Catholics, Jews and immigrants from Asia, were deemed undesirable. They were more likely to default on their loans than other, more “loan-worthy” neighbors. It had some merit as many low-income neighborhoods did have a history of not paying debt on time or at all.³
However, when it was discovered that even potential borrowers who were qualified were also being turned away, the government stepped in and created the Fair Housing Act to solve the problem. Passed in 1968 by President Johnson, The FHA has helped millions of people that would otherwise have not been able to get home loans.⁴
Is the list of cities where Black People still have more trouble than others helping to identify continued racism? Or is it simply revealing the economic fact that our government has failed us in other areas?
