Charlottesville MSA apparently is a risky place to get a loan if you’re a minority

Moved from the sideblog category, as it truly deserves to be highlighted.

But the Charlottesville MSA apparently is a risky place to get a loan if you’re a minority. The conversation at cvillenews continues to be interesting. These numbers are shameful, and those who are both responsible and profiting from this to be held publicly accountable.

Any local lenders want to comment? Feel free to use a pseudonym.

Pull the files from the top three local banks (or more), and compare apples to apples on applications – credit scores, income, debt ratios, the whole thing, and report those findings. I am confident that nobody I work with practices these tactics, but I’d sure like to put faces and names to the numbers. There are predatory people in every business, surely, but this scale is shameful and needs to be addressed. Now.

More at Inman (paid subscription required after tomorrow) – interestingly,

The study found greater racial disparities in high-cost loans made to middle- to upper-income minorities than to low- to moderate-income borrowers.

Are the disparities found more at the huge national banks, or the small, private ones? I don’t want to speculate on which ones, but I’d say that the problems are likely the function of systemic breakdowns and the people involved rather than companies directing their lenders to discriminate.

Hopefully this story won’t go away.

If possible, I’d like to see a greater breakdown, by locality, of the numbers. The Charlottesville MSA comprises Charlottesville, Albemarle, Fluvanna, Greene and Nelson (and Louisa, although it’s not included in the numbers).

Update 7/13/07:  The Daily Progress has an article today (no longer available) that shows that raises three interesting points:

1) Out-of-state lenders specifically targeting black borrowers may be the primary culprits.
2) “On average, black households have one-sixth the total assets of comparable white households, he said.”
3) “Income is just one aspect of a borrower’s creditworthiness. There are a number of factors, …”

Again, an apples to apples comparison is needed to make an accurate assessment of the situation. There are too many factors besides income to be considered when applying for a loan. No doubt there is discrimination happening, although I would feel a lot better about our community if it could be determined that a super majority of these loans were coming from out-of-state lenders.

Education is the key – education of the lenders (again, I have yet to meet one in Charlottesville who does this) and education of the consumers. Heck, start at the Mortgage Professor’s site.

The NCRC went after Zillow last year.

Update 7/17/2007: As a black mortgage broker, I am going to go on record and say that this lawsuit is bunk for a number of reasons: