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From the Business Section of the New York Times:

Study Strongly Links Baltimore Mortgage Denials to Race
By PETER EAVIS NOV. 16, 2015

The black population of Baltimore is double that of the white population. Yet in 2013, banks made more than twice as many mortgage loans to whites in the city as they did to blacks.

Baltimore blacks were long dogged by malicious stereotypes spread by The Wire, but their behavior in 2015 — first rioting, then murdering each other in large numbers — has demonstrated their financial trustworthiness. How delusionally racist are lenders to not see that houses in Baltimore black neighborhoods are sure bets?

The stark difference in mortgage lending, derived from the most recent government mortgage data, is the focus of a new study that will be released on Tuesday by the National Community Reinvestment Coalition, a consumer advocacy group.

Given that the government does not collect certain important types of data on borrowers, researchers have long found it difficult to determine the degree to which race affects mortgage lending.

Still, the coalition says its analysis shows that the racial makeup of a neighborhood — and not income, for instance — is the most significant predictor of whether a loan gets made in Baltimore.

Exploring the causes of the economic differences between blacks and whites in Baltimore has taken on an added urgency after the protests and riots in the city this year. The unrest followed the death in April of Freddie Gray, who died after suffering a spinal cord injury in police custody. Unemployment is higher than the national average in Baltimore, and particularly so among younger blacks in the city.

“If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim,” said John Taylor, the coalition’s president. “In Baltimore, the prevailing factor behind who gets a mortgage is the racial composition of the neighborhood.”

… Still, it has long been the case that the rate at which blacks get denied a mortgage is higher than that for whites. In 2013, for instance, blacks were denied on 25.5 percent of their applications for mortgages to purchase a home, compared with 12.2 percent for whites, according to an analysis of the government mortgage data by the Federal Reserve. The higher denial rate for blacks might, for instance, be explained by differences in credit history and the amount of money that borrowers can put down as a deposit.

Indeed, according to the Fed’s analysis of the government mortgage data from 2013, banks said credit history was the reason behind 30 percent of their denials of black borrowers. For whites, banks said it was the cause in 22.5 percent of the cases.

Still, the reasons for the high rate of denials remain murky.

Here’s a suggestion: the high rate of defaults by blacks.

As a result, questions will continue to hang over the high denial rate for blacks and the low level of lending in neighborhoods where blacks or other minorities are the majority. And these questions were in part behind the coalition’s analysis of Baltimore, a city that has in the past suffered from redlining — the term given to policies and practices that made it very difficult for blacks to obtain mortgages or take out home loans at the same terms as whites.

I’m fascinated by the lack of cognitive integration apparent these days. For example, like everybody else who reads the NYT, I watched The Wire. One obvious implication of the celebrated TV show is that you ought to be very cautious about lending money to homebuyers in that violent place. But nobody seems anymore able to perform elementary acts of mental integration of knowledge.

Likewise, everybody knows that the Foreclosure Crisis was hard on blacks. But nobody seems to know that that’s just another way of saying blacks defaulted on their debts a lot.

 
• Tags: Mortgage, Real Estate 
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  1. Yak-15 says:

    Strange, this is a clear arbitrage opportunity to George Soros. Why isn’t he diving in hand over fist? Perhaps it’s because he is racist.

    Read More
    • Agree: Travis, ben tillman
    • Replies: @iSteveFan

    Strange, this is a clear arbitrage opportunity to George Soros.
     
    If there is money to be made, and banks are not taking advantage of it due to racism, then why haven't others jumped in? Not only do financiers like Soros not take the plunge, but I don't even see any grassroots efforts at microlending. You would think prominent blacks like Oprah would help organize microlending. Black lives matters might due more good if instead they organized a community lending program.

    The fact no one seems to be jumping into this is sort of proof that there is not money to be made here.
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  2. The default rate is higher for blacks than for whites, therefore the banks are lending to more blacks who are not credit worthy than whites, therefore their underwriting standards are lower for blacks.
    It’s not rocket science.

    Read More
    • Replies: @Ali999
    Have we ever heard of a banker that wouldn't make money anyway s/he could? If there was money to be made in lending to a certain population, we can bet they'd do it, color be dmned. It seems more likely that they'd charge higher rates than not lend at all if the loan were going to be at all profitable.
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  3. If you really want to get down to the brass tacks, look at the approval ratings for whites buying in black neighborhoods (if you can find any) and blacks buying in white neighborhoods. Any lender with a lick of common sense would be reluctant to invest in property whose value is likely to decline, regardless of the race of the borrower.

    Read More
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  4. ic1000 says:

    > “If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim”

    Coalition president John Taylor’s reasoning is that taking on housing debt and then having to pay it back monthly is the way for a person on welfare to work their way out of poverty. If that person starts off with earnings like Mr. Taylor’s (and his level of conscientiousness), that may well be true.

    Oh, wait.

    Read More
    • Replies: @Bill
    I, too, was fascinated by the whole "get rich by taking out a mortgage" concept. Black neighborhoods tend to be well-supplied with payday lenders and rent-to-own places. Can't they get rich by taking out loans there?
    , @ATX Hipster
    That quote was my favorite part, too. I'd always thought that getting a job and working was the way out of poverty, with home ownership as a reward. Apparently I've had it backwards. No wonder I don't make much money... I'm not a home owner.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  5. Anon says: • Disclaimer

    NYT should run headlines…

    Study Strongly Links Baltimore Rapes to (black)Race

    Study Strongly Links Baltimore Arsons to (black)Race

    Study Strongly Links Baltimore Assaults to (black)Race

    Study Strongly Links Baltimore Robberies to (black)Race

    Study Strongly Links Baltimore Burglaries to (black)Race

    Study Strongly Links Baltimore Murders to (black)Race

    Study Strongly Links Baltimore Corruption to (black)Race

    Study Strongly Links Baltimore Frauds to (black)Race

    Study Strongly Links Baltimore Unruly Behavior to (black)Race

    If a 1000 blacks kill 1000 blacks, the media run the story ’1000 blacks victimized by violence’ but suppress the more important story that 1000 blacks did the killing.

    Narrative has to fit blacks as victims always.

    Read More
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  6. Bill says:
    @ic1000
    > “If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim”

    Coalition president John Taylor's reasoning is that taking on housing debt and then having to pay it back monthly is the way for a person on welfare to work their way out of poverty. If that person starts off with earnings like Mr. Taylor's (and his level of conscientiousness), that may well be true.

    Oh, wait.

    I, too, was fascinated by the whole “get rich by taking out a mortgage” concept. Black neighborhoods tend to be well-supplied with payday lenders and rent-to-own places. Can’t they get rich by taking out loans there?

    Read More
    • Agree: ATX Hipster
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  7. Dumb. I have worked in the credit industry. You cannot red line because you cannot use geographic information in making a loan decision. Loan decisions are made by a computer algorithms that use your credit history, your work history and your income to decide whether to give you a loan. These algorithms need to be approved by a government agency and any potentially disparate impact component needs to be justified. This scrutiny is probably the reason why minorities have higher default rates.

    Read More
    • Replies: @E. Rekshun
    "Loan decisions are made by a computer algorithms"

    Everyone knows that computer algorithms are raaacciist!
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  8. MarkinLA says:

    Once more social “science” proves itself to be anything but. Obviously, these politically motivated studies are useless for solving any real world problems. I am sure you can find hundreds of things you can correlate with low black mortgage approval rates and with a convincing enough narrative turn it into as useless a study as this is. All these studies are good for is giving useless social scientists grant money and race hustlers fuel for their shakedown operations.

    It would be nice if some major university did the world a favor and disbanded all their social science departments. Hopefully, that would be the start of a trend. However, many universities take pride in the ranking of these departments. I know years back UCLA was bragging that their sociology department was ranked 20th in the country or something like that. So they viewed that as a badge of honor. I guess it is used to attract grad students as cheap labor for the professors.

    Read More
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  9. Luke Lea says: • Website

    Isn’t the unconscious (or perhaps conscious) motive of stories like this to confirm a racial stereotype? Maybe this is the only way for an honest NYT reporter to subvert the taboo surrounding this subject?

    # because stereotypes are useful when the sample size is large

    Read More
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  10. Forbes says:

    according to the Fed’s analysis of the government mortgage data from 2013, banks said

    Strange way to word/explain something… If the Fed analyzed the data, then it would be the Fed’s conclusion that would ordinarily be highlighted, not what “banks said.”

    Read More
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  11. Mike1 says:

    As a lender it is incredibly obvious that almost all lending is a stupidity tax. All these geniuses working all their life to pay off a mortgage don’t realize that the only reason their purchase price is so high is because of loans in the first place. A house anywhere (despite all the mindless reasons given for why your patch of ground is so desirable) would be worth $100k median without mortgage loans.

    If people actually had to save and borrow money that other people had saved houses would be about two times local median income. Interest rates would be higher so people would actually pay their houses off and retirees would be able to make a return on their saved capital.

    Our actual system of giving banks a franchise to print money fulfills the same purpose as state lotteries. Almost everyone buys in, the odd person gets a huge undeserved win and everyone else has less money than they otherwise would have.

    Read More
    • Agree: E. Rekshun
    • Replies: @unpc downunder
    If people actually had to save and borrow money that other people had saved houses would be about two times local median income. "

    Australian banks used to have very conservative lending policies in regard to housing loans. In the 1980s they started liberalising lending policies and before the last recession were offering 10 percent deposit mortgages. During this time average house prices have increased from about four times median income to about nine times median income.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  12. Read More
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  13. Buzz Mohawk says: • Website

    I’m fascinated by the lack of cognitive integration apparent these days.

    You hit the nail on the head.

    Most people can’t even pick up the hammer.

    Read More
    • Replies: @Reg Cæsar

    You hit the nail on the head.

    Most people can’t even pick up the hammer.

     

    Nails are not there to be hammered; they are there to be polished.

    And when your only tool is a polish, everything still looks like a nail.
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  14. Baltimore blacks were long dogged by malicious stereotypes spread by The Wire, but their behavior in 2015 — first rioting, then murdering each other in large numbers — has demonstrated their financial trustworthiness. How delusionally racist are lenders to not see that houses in Baltimore black neighborhoods are sure bets?

    We need a catchy name for this.

    I suggest “the New Baltimore Catechism”.

    Read More
    • Replies: @AnotherDad

    We need a catchy name for this.

    I suggest “the New Baltimore Catechism”.
     
    +1! Exactly what it is.

    But i'm not sure those born even ten years after i was, even Catholics, would get it.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  15. @Buzz Mohawk

    I’m fascinated by the lack of cognitive integration apparent these days.
     
    You hit the nail on the head.

    Most people can't even pick up the hammer.

    You hit the nail on the head.

    Most people can’t even pick up the hammer.

    Nails are not there to be hammered; they are there to be polished.

    And when your only tool is a polish, everything still looks like a nail.

    Read More
    • Replies: @Buzz Mohawk

    Nails are not there to be hammered; they are there to be polished.

    And when your only tool is a polish, everything still looks like a nail.
     
    Well, as Japanese manicurists say, the nail that sticks out gets filed.

    Most people can't even file down a rough bit of logic now.

    (Are there any Japanese manicurists? All the ones my wife goes to are Korean. She's met scores of them...or at least dozens...certainly more than a brace of them...)
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  16. “But nobody seems to know that that’s just another way of saying blacks defaulted on their debts a lot.”

    Oh, they know, and they know you know, but they also know that you’re not allowed to say it.

    They’re arbitraging the taboo.

    Read More
    • Replies: @Bill

    They’re arbitraging the taboo.
     
    +1
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  17. AndrewR says:

    What? Everyone knows that the reason the Foreclosure Crisis was due to racist banks breaking the terms of their contracts and foreclosing on solvent persons of color out of pure spite!

    Read More
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  18. @Reg Cæsar

    Baltimore blacks were long dogged by malicious stereotypes spread by The Wire, but their behavior in 2015 — first rioting, then murdering each other in large numbers — has demonstrated their financial trustworthiness. How delusionally racist are lenders to not see that houses in Baltimore black neighborhoods are sure bets?
     
    We need a catchy name for this.

    I suggest "the New Baltimore Catechism".

    We need a catchy name for this.

    I suggest “the New Baltimore Catechism”.

    +1! Exactly what it is.

    But i’m not sure those born even ten years after i was, even Catholics, would get it.

    Read More
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  19. Ali999 says:
    @Bill Jones
    The default rate is higher for blacks than for whites, therefore the banks are lending to more blacks who are not credit worthy than whites, therefore their underwriting standards are lower for blacks.
    It's not rocket science.

    Have we ever heard of a banker that wouldn’t make money anyway s/he could? If there was money to be made in lending to a certain population, we can bet they’d do it, color be dmned. It seems more likely that they’d charge higher rates than not lend at all if the loan were going to be at all profitable.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  20. Dee says:

    When I was selling RE back in the ’80s, the experienced agents told me a black buyer would have a good job, money for the down payment, and then the credit report comes in and no way would a lender fund a loan.

    One guy was a landscaper, GMAC loan on his truck came back with 25 late payments on the credit report. On a loan that wasn’t quite 30 months old. I called up GMAC and was told he had missed making a payment, then he made the next 25 payments on time. GMAC applied the next payment after the missed one to the one he missed, and so he was late again; he had to make two payments in one month to get back on time.

    Why GMAC never made an effort to contact him and tell him his credit was being destroyed, I can’t answer. I don’t know it he just had a payment book and just sent in a payment with that, or GMAC was actually sending a monthly statement with loan status on it. And he wasn’t reading or understanding it.

    I saw an article couple of years ago that I can’t find again, a female professor at Cal Berkeley had interviewed about 50 blacks getting foreclosed in Oakland. And 50 Hispanics in Stockton also losing the house. She asked how they had found the lender to their soon to be gone mortgage; almost all of them said they found somebody in the ghetto or barrio. They figured being a fellow racial member they wouldn’t get cheated like if they got a loan from whitey. They got cheated; greed doesn’t care about skin pigment, just cash.

    Read More
    • Replies: @Barnard
    Why do you think GMAC didn't contact him about the missed payment? They almost certainly sent him a letter every month informing him he was a month behind and had late charges, etc.
    , @Ivy
    The GMAC late payment example has been a fairly common practice among some but not all home, credit card and auto lenders, and was often part of their business model. Sub-prime lenders relied significantly on late fees and other charges.

    The rationale is as follows: Why not continue to collect a late fee, and maybe some default interest, on a loan instead of spending the extra money on staff to reduce delinquencies. Lenders have some degree of control outside meltdowns to run their delinquencies looser or tighter.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  21. Median household income for whites in Baltimore is almost twice that for blacks ($60,550 vs. $33,610). But I’m sure that has nothing to do with the mortgage disparity. Just another case of “white privilege.”

    Read More
    • Replies: @AnAnon
    household income is one of those cooked statistics that I really don't like. In this particular case, check the number of workers per household(IE marriage).
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  22. @ic1000
    > “If lenders are not making loans in a community, the opportunities for people to work their way out of poverty is pretty slim”

    Coalition president John Taylor's reasoning is that taking on housing debt and then having to pay it back monthly is the way for a person on welfare to work their way out of poverty. If that person starts off with earnings like Mr. Taylor's (and his level of conscientiousness), that may well be true.

    Oh, wait.

    That quote was my favorite part, too. I’d always thought that getting a job and working was the way out of poverty, with home ownership as a reward. Apparently I’ve had it backwards. No wonder I don’t make much money… I’m not a home owner.

    Read More
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  23. anon says: • Disclaimer

    Make it easier for banks to repo houses and more will lend. Blacks have no trouble getting car loans.

    Read More
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  24. Bill says:
    @Desiderius
    "But nobody seems to know that that’s just another way of saying blacks defaulted on their debts a lot."

    Oh, they know, and they know you know, but they also know that you're not allowed to say it.

    They're arbitraging the taboo.

    They’re arbitraging the taboo.

    +1

    Read More
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  25. iSteveFan says:
    @Yak-15
    Strange, this is a clear arbitrage opportunity to George Soros. Why isn't he diving in hand over fist? Perhaps it's because he is racist.

    Strange, this is a clear arbitrage opportunity to George Soros.

    If there is money to be made, and banks are not taking advantage of it due to racism, then why haven’t others jumped in? Not only do financiers like Soros not take the plunge, but I don’t even see any grassroots efforts at microlending. You would think prominent blacks like Oprah would help organize microlending. Black lives matters might due more good if instead they organized a community lending program.

    The fact no one seems to be jumping into this is sort of proof that there is not money to be made here.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  26. @Larry, San Francisco
    Dumb. I have worked in the credit industry. You cannot red line because you cannot use geographic information in making a loan decision. Loan decisions are made by a computer algorithms that use your credit history, your work history and your income to decide whether to give you a loan. These algorithms need to be approved by a government agency and any potentially disparate impact component needs to be justified. This scrutiny is probably the reason why minorities have higher default rates.

    “Loan decisions are made by a computer algorithms”

    Everyone knows that computer algorithms are raaacciist!

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  27. Years ago while driving on US1 through Baltimore my daughter pointed out the unusual ” window treatments” which were sheets of plywood. Well, you know, out of the mouths of babes/

    Read More
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  28. Barnard says:
    @Dee
    When I was selling RE back in the '80s, the experienced agents told me a black buyer would have a good job, money for the down payment, and then the credit report comes in and no way would a lender fund a loan.

    One guy was a landscaper, GMAC loan on his truck came back with 25 late payments on the credit report. On a loan that wasn't quite 30 months old. I called up GMAC and was told he had missed making a payment, then he made the next 25 payments on time. GMAC applied the next payment after the missed one to the one he missed, and so he was late again; he had to make two payments in one month to get back on time.

    Why GMAC never made an effort to contact him and tell him his credit was being destroyed, I can't answer. I don't know it he just had a payment book and just sent in a payment with that, or GMAC was actually sending a monthly statement with loan status on it. And he wasn't reading or understanding it.


    I saw an article couple of years ago that I can't find again, a female professor at Cal Berkeley had interviewed about 50 blacks getting foreclosed in Oakland. And 50 Hispanics in Stockton also losing the house. She asked how they had found the lender to their soon to be gone mortgage; almost all of them said they found somebody in the ghetto or barrio. They figured being a fellow racial member they wouldn't get cheated like if they got a loan from whitey. They got cheated; greed doesn't care about skin pigment, just cash.

    Why do you think GMAC didn’t contact him about the missed payment? They almost certainly sent him a letter every month informing him he was a month behind and had late charges, etc.

    Read More
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  29. The big money to be made is on the graft and extortion side taking advantage of the taboo.

    Maybe that’s why some of the superrich are funding BLM. To destroy that taboo.

    Read More
    • Replies: @Elites
    I'm not the sharpest tool in the shed but from my first car loan I knew what the date on the payment coupon meant.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  30. AnAnon says:
    @Black Death
    Median household income for whites in Baltimore is almost twice that for blacks ($60,550 vs. $33,610). But I'm sure that has nothing to do with the mortgage disparity. Just another case of "white privilege."

    household income is one of those cooked statistics that I really don’t like. In this particular case, check the number of workers per household(IE marriage).

    Read More
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  31. David says:

    OT, there is a kind of tedious but worthwhile documentary over at the intercept/greenwald about a hostile climate for Muslims in France pre and post Hebdo. In it, a professor at the University of Paris, Pierre Zaoui, whom I’d never heard of, who calls himself a non-Zionist Jew, comments (even before the latest Paris attacks), “No need to fear the rise of the National Front in 2017, they have already won.”

    Read More
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  32. Mr. Blank says:

    To be fair, Steve, I think David Simon, the guy who created The Wire, can’t make this mental leap, either — even after having a front-row seat to all this stuff.

    Read More
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  33. Ivy says:
    @Dee
    When I was selling RE back in the '80s, the experienced agents told me a black buyer would have a good job, money for the down payment, and then the credit report comes in and no way would a lender fund a loan.

    One guy was a landscaper, GMAC loan on his truck came back with 25 late payments on the credit report. On a loan that wasn't quite 30 months old. I called up GMAC and was told he had missed making a payment, then he made the next 25 payments on time. GMAC applied the next payment after the missed one to the one he missed, and so he was late again; he had to make two payments in one month to get back on time.

    Why GMAC never made an effort to contact him and tell him his credit was being destroyed, I can't answer. I don't know it he just had a payment book and just sent in a payment with that, or GMAC was actually sending a monthly statement with loan status on it. And he wasn't reading or understanding it.


    I saw an article couple of years ago that I can't find again, a female professor at Cal Berkeley had interviewed about 50 blacks getting foreclosed in Oakland. And 50 Hispanics in Stockton also losing the house. She asked how they had found the lender to their soon to be gone mortgage; almost all of them said they found somebody in the ghetto or barrio. They figured being a fellow racial member they wouldn't get cheated like if they got a loan from whitey. They got cheated; greed doesn't care about skin pigment, just cash.

    The GMAC late payment example has been a fairly common practice among some but not all home, credit card and auto lenders, and was often part of their business model. Sub-prime lenders relied significantly on late fees and other charges.

    The rationale is as follows: Why not continue to collect a late fee, and maybe some default interest, on a loan instead of spending the extra money on staff to reduce delinquencies. Lenders have some degree of control outside meltdowns to run their delinquencies looser or tighter.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  34. ic1000 says:

    An unappreciated aspect of home ownership is that it’s a big advantage to be handy and to enjoy fixing stuff. Routine actions like spackling and painting, replacing faulty outlets, changing the lawn mower’s oil. From what I can see, the moms heading most poor black families lack the skills and the interest for these tasks. And there’s little in the budget for paying an outsider to do the job.

    People in this situation need a decent super more than they need a mortgage. Obvious, but beyond the abilities of the elites to process.

    Read More
    • Replies: @E. Rekshun
    From what I can see, the moms heading most poor black families lack the skills and the interest for these tasks.

    Nor, apparently, do their sons or baby daddies.
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  35. Buzz Mohawk says: • Website
    @Reg Cæsar

    You hit the nail on the head.

    Most people can’t even pick up the hammer.

     

    Nails are not there to be hammered; they are there to be polished.

    And when your only tool is a polish, everything still looks like a nail.

    Nails are not there to be hammered; they are there to be polished.

    And when your only tool is a polish, everything still looks like a nail.

    Well, as Japanese manicurists say, the nail that sticks out gets filed.

    Most people can’t even file down a rough bit of logic now.

    (Are there any Japanese manicurists? All the ones my wife goes to are Korean. She’s met scores of them…or at least dozens…certainly more than a brace of them…)

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  36. Elites says:
    @Desiderius
    The big money to be made is on the graft and extortion side taking advantage of the taboo.

    Maybe that's why some of the superrich are funding BLM. To destroy that taboo.

    I’m not the sharpest tool in the shed but from my first car loan I knew what the date on the payment coupon meant.

    Read More
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  37. Interesting factoid I heard on public radio:

    According to New Zealand law it’s acceptable (in theory at least ) for banks and insurance companies to discriminate against people according to gender if they have statistically backed reasons for doing so. In practice this primarily takes the form of discrimination against young men – young female drivers are charged lower insurance premiums since they have fewer serious accidents.

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What’s the situation in the US?

    Read More
    • Replies: @Reg Cæsar

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What’s the situation in the US?
     
    Exactly the same, unless some states (name any) addressed this.

    I was so put off by this practice that I put off getting my license until almost age 25, when the rates go down considerably, and more than eight years after passing driver's ed in high school.

    But I wasn't angered by the insurers' discrimination, but at their lack of it. I knew full well what many of my male friends were like behind the wheel, and saw the sense in charging them more. But I wasn't one of them.

    They could discriminate by sex, but couldn't be bothered to discriminate within a sex. So why should I give them my money?
    , @E. Rekshun
    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    My auto insurer, Progressive, gives me a 5% discount because I hold a Masters degree. They also give me discounts because I am a long-time customer, a homeowner, and a low-mileage safe driver. I'm getting almost 30% off the regular rate.
    , @Triumph104
    Auto insurers in 47/50 states charge more to people with bad credit.

    Of course life insurers charge based on age and sex and charge more or even refuse to insure those with major medical conditions like type I diabetes.

    I never heard of a bank discriminating for age. Elderly people get loans. This year Hudson Bank got fined $27 million for avoiding black and Hispanic customers.
    http://www.consumerfinance.gov/newsroom/cfpb-and-doj-order-hudson-city-savings-bank-to-pay-27-million-to-increase-mortgage-credit-access-in-communities-illegally-redlined/
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  38. @Mike1
    As a lender it is incredibly obvious that almost all lending is a stupidity tax. All these geniuses working all their life to pay off a mortgage don't realize that the only reason their purchase price is so high is because of loans in the first place. A house anywhere (despite all the mindless reasons given for why your patch of ground is so desirable) would be worth $100k median without mortgage loans.

    If people actually had to save and borrow money that other people had saved houses would be about two times local median income. Interest rates would be higher so people would actually pay their houses off and retirees would be able to make a return on their saved capital.

    Our actual system of giving banks a franchise to print money fulfills the same purpose as state lotteries. Almost everyone buys in, the odd person gets a huge undeserved win and everyone else has less money than they otherwise would have.

    If people actually had to save and borrow money that other people had saved houses would be about two times local median income. ”

    Australian banks used to have very conservative lending policies in regard to housing loans. In the 1980s they started liberalising lending policies and before the last recession were offering 10 percent deposit mortgages. During this time average house prices have increased from about four times median income to about nine times median income.

    Read More
    • Replies: @Mike1
    Australia's lending is wildly out of control. It is headed for a crash that will be remembered for hundreds of years.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  39. @unpc downunder
    Interesting factoid I heard on public radio:

    According to New Zealand law it's acceptable (in theory at least ) for banks and insurance companies to discriminate against people according to gender if they have statistically backed reasons for doing so. In practice this primarily takes the form of discrimination against young men - young female drivers are charged lower insurance premiums since they have fewer serious accidents.

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What's the situation in the US?

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What’s the situation in the US?

    Exactly the same, unless some states (name any) addressed this.

    I was so put off by this practice that I put off getting my license until almost age 25, when the rates go down considerably, and more than eight years after passing driver’s ed in high school.

    But I wasn’t angered by the insurers’ discrimination, but at their lack of it. I knew full well what many of my male friends were like behind the wheel, and saw the sense in charging them more. But I wasn’t one of them.

    They could discriminate by sex, but couldn’t be bothered to discriminate within a sex. So why should I give them my money?

    Read More
    • Replies: @Rob McX

    They could discriminate by sex, but couldn’t be bothered to discriminate within a sex.
     
    Here's a way that insurance risks can be calculated for individual drivers, and it seems to be effective.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  40. @ic1000
    An unappreciated aspect of home ownership is that it's a big advantage to be handy and to enjoy fixing stuff. Routine actions like spackling and painting, replacing faulty outlets, changing the lawn mower's oil. From what I can see, the moms heading most poor black families lack the skills and the interest for these tasks. And there's little in the budget for paying an outsider to do the job.

    People in this situation need a decent super more than they need a mortgage. Obvious, but beyond the abilities of the elites to process.

    From what I can see, the moms heading most poor black families lack the skills and the interest for these tasks.

    Nor, apparently, do their sons or baby daddies.

    Read More
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  41. @unpc downunder
    Interesting factoid I heard on public radio:

    According to New Zealand law it's acceptable (in theory at least ) for banks and insurance companies to discriminate against people according to gender if they have statistically backed reasons for doing so. In practice this primarily takes the form of discrimination against young men - young female drivers are charged lower insurance premiums since they have fewer serious accidents.

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What's the situation in the US?

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    My auto insurer, Progressive, gives me a 5% discount because I hold a Masters degree. They also give me discounts because I am a long-time customer, a homeowner, and a low-mileage safe driver. I’m getting almost 30% off the regular rate.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  42. Rob McX says:
    @Reg Cæsar

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What’s the situation in the US?
     
    Exactly the same, unless some states (name any) addressed this.

    I was so put off by this practice that I put off getting my license until almost age 25, when the rates go down considerably, and more than eight years after passing driver's ed in high school.

    But I wasn't angered by the insurers' discrimination, but at their lack of it. I knew full well what many of my male friends were like behind the wheel, and saw the sense in charging them more. But I wasn't one of them.

    They could discriminate by sex, but couldn't be bothered to discriminate within a sex. So why should I give them my money?

    They could discriminate by sex, but couldn’t be bothered to discriminate within a sex.

    Here’s a way that insurance risks can be calculated for individual drivers, and it seems to be effective.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  43. Mike1 says:
    @unpc downunder
    If people actually had to save and borrow money that other people had saved houses would be about two times local median income. "

    Australian banks used to have very conservative lending policies in regard to housing loans. In the 1980s they started liberalising lending policies and before the last recession were offering 10 percent deposit mortgages. During this time average house prices have increased from about four times median income to about nine times median income.

    Australia’s lending is wildly out of control. It is headed for a crash that will be remembered for hundreds of years.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  44. @unpc downunder
    Interesting factoid I heard on public radio:

    According to New Zealand law it's acceptable (in theory at least ) for banks and insurance companies to discriminate against people according to gender if they have statistically backed reasons for doing so. In practice this primarily takes the form of discrimination against young men - young female drivers are charged lower insurance premiums since they have fewer serious accidents.

    I would have thought discriminating against drivers would be according to education level would be fairer, but as far as I know insurance companies never do this.

    What's the situation in the US?

    Auto insurers in 47/50 states charge more to people with bad credit.

    Of course life insurers charge based on age and sex and charge more or even refuse to insure those with major medical conditions like type I diabetes.

    I never heard of a bank discriminating for age. Elderly people get loans. This year Hudson Bank got fined $27 million for avoiding black and Hispanic customers.

    http://www.consumerfinance.gov/newsroom/cfpb-and-doj-order-hudson-city-savings-bank-to-pay-27-million-to-increase-mortgage-credit-access-in-communities-illegally-redlined/

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments

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