Black Money Business Jobs : Financial Illiteracy / Racism Threaten Black Borrowers

Discussion in 'Black Money Business Jobs' started by Destee, Jan 12, 2008.

  1. Destee

    Destee destee.com STAFF

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    Financial illiteracy and racism threaten African American and Native American Borrowers

    by Monica Davis ( davis4000_2000 [at] yahoo.com )

    Thursday Jan 10th, 2008 1:05 PM

    Despite decades of civil rights laws and federal anti-discriminating lending statutes, blacks and Native American loan applicants still get the short end of the stick in the lending process.

    Black home owners, renters and property owners are taking a massive hit in the latest economic turmoil in the housing and banking industry. Already vulnerable, targeted by predatory lenders, regardless of their income and credit history, many people of color are now finding themselves in an economic catastrophe, often due to a combination of financial illiteracy and a desire to have their own piece of the American dream—a home of their own.

    Unfortunately, many dreams are becoming nightmares. Renters are being disposed by foreclosure agents after their landlords failed to pay the mortgage. Families are thrown out into the street after failing to pay their mortgages—and still have to find a place to sleep. And those who are left in the neighborhoods watch their property values decline as entire neighborhoods become ghettos of foreclosed homes, prime fodder for vandals and vagrants.

    For all of the progress that has been made—real or imagined, the fact remains that minority borrowers are more likely to be saddled with and stung by over-priced loans than are whites with comparable incomes and credit histories.

    Now, what have we learned here? We’ve learned that black, Native American and Hispanic borrowers are herded to higher interest, predatory loans. We’ve learned that lenders still balk at lending in some areas. And, we have learned that people of color still are denied loans at a higher rate than are white borrowers.

    Bottom line, even before the so-called foreclosure crisis began making headlines, Native Americans and other ethnic groups were already being denied loans based on their ethnicity and where they chose to live, despite the illegality of those denials. And, in the off chance that they were “approved” for a loan, they were often herded to higher interest, even predatory loan products.

    So, what do you think is going to happen when people who are already last hired, first fired find themselves laid off in from the housing industry, automotive industry and, yes, even the banking industry?

    Click Here To Read Entire Article

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    Destee
     
  2. mrron

    mrron Well-Known Member MEMBER

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    "No child left behind", that should be more than a policy of the education department. It should be the policy of every family raising children in today's world. When it comes to buying a house, if there is no knowledgable person in the family, than an attorney should be consulted. The sub prime loan problem, was not intended to destroy the black community, or any other community. The banks are going under because of this blunder. They actually saw an opportunity to generate more business by making loans available to people who didn't qualify for standard loans. This was a good thing at its conception. What happened to many people is that they didn't understand the terms of the loans, which basically states that your initial payments are only a part of what they are suppose to be. They will rise to the regular rate in about two to three years. So you have that amount of time to figure out how you are going to meet the payments once they increase. That can be done in several different ways. The first thing to do is to find out how much the actual payment is going to be. If you can't see how you are going to do it, then you shouldn't agree to it. Many people can solve the problem by improving their credit score during that two or three year period, and then refinance the loan to a lower fixed rate. That is being done by many. Another way is to rent out a room, to get extra money to pay for the increase payment. Get a better job is another way. One has to be responsible for the deals they make, and should get good advice if they don't understand the terms.

    Making this a racial issue is just plain stupid. They are talking about two million foreclosures this year, and maybe many more in the future. I think about all of the threads that talk about how black folks can't get a loan. Now here's one that say's too many blacks are getting loans they can't afford. Believe me this, the only people making this a black issue are the so called black leaders, like Al Sharpton and Jessie Jackson, who make their living talking about racial injustice, even when it doesn't exist. The vast majority of these loans went to white folks, I even know of a few of them personally. I have friends and associates in the business, this is not about duping black folks and putting the entire economy at risk.

    The government is going to have to step in a stop these foreclosures, before there is a major housing crisis. For those people such as myself, an investor, those loans were great, because it decreases my cost of "flipping" a house that I wish to buy and sell. I also put my daughter in a fantastic house that she wouldn't have been able to get at the time given her income and credit score. She has since refinanced, by improving her credit score, and taking in her future husband. The sub prime loans just offered another option, but many people just didn't fully appreciate that option
     
  3. Destee

    Destee destee.com STAFF

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    I'm not going to believe you, because you're clearly wrong.

    The author of this article is neither Sharpton nor Jackson ... her name is Monica Davis, and she's not a "Black Leader."

    :heart:

    Destee
     
  4. mazimtaim

    mazimtaim Well-Known Member MEMBER

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    Well. . .

    Well, we know we can't trust the credibility of Al or Jesse. . .unlike that guy Bush.

    ??????

    I don't get it.

    Anyway, the predatory loans are the only kind we are eligible for. You are right, Sister Destee. We need more education in this area. I am going to buy my building very soon. And I will need some help to make sure I am getting a fair deal.
     
  5. Omowale Jabali

    Omowale Jabali The Cosmic Journeyman PREMIUM MEMBER

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    Quote:

    "Anyway, the predatory loans are the only kind we are eligible for."

    If so, it shows how much things have changed within the last three years.

    When I bought my home I qualified for a conventional 30 year fixed with an interest rate below 6.5%.

    However, I was able to put 20% down.

    A lot of prospecting homebuyers today, black and white, are not even able to afford to pay 3% down and are having to roll back closing costs for existing homes, and new homes are becoming increaingly out of reach. Even whites are having to go to more than one lender to finance ome are able to quality with say, 20% fixed, 80% adjustable.

    This I know from recently selling my home. And in this process I had mostly young white folks express interest, many of whom had problems getting their loans financed.
     
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