Dual Income No Kids had an article based on a book published regarding race and poverty. Wow, that’s a big topic that could fill its on site. James reviewed the books thoughts and summarized it.
In closing James remarked:
So, it seems that lower wealth in African-American and Hispanic families has less to do with discrimination and culture, and more to do with family dynamics and educational attainment.
That sentence bothered me a bit. If I had re-write the sentence, I would say:
It seems that lower wealth in African-American and Hispanic families has to do with educational attainment, discrimination, and family dynamics.
His conclusion seemed incomplete to me.
- Educational attainment and family dynamics has an effect on every race, not just those two ethic groups
- There have been documented cases of discrimination in areas of employment, education, and housing.
We don’t live in a perfect society. People are discriminated for many things besides race; such as gender, age, religion, and physical capabilities.
Just looking at the mortgage area, there is concern over how lending is different among the races. By reducing cases of discrimination, it can help families, including African-Americans and Hispanics, to increase their personal wealth.
The Urban Institute researched some claims and did find evidence of discrimination in mortgage lending. Besides just documenting the problem, it tried to offer some solutions. Some suggestions that the Urban Institute recommended were:
- The Urban Institute report concludes by recommending priority next steps in measuring mortgage discrimination and developing policies and practices to better combat it. These recommendations include:
- Expanded research on lender decisions about office locations, advertising and outreach, as well as referrals that may discourage minorities from ever applying for loans with some institutions.
- Stepped-up testing at the pre-application stage and possibly the loan approval stage as well, for research, enforcement, and self-assessment by lenders themselves.
- New nationwide studies of mortgage lending, including analysis of mortgage loan performance to determine the “business necessity” of lending criteria and procedures that disproportionately disadvantage minorities.
- Expanded research on loan terms and conditions, including examination of relatively recent market trends such as risk-based pricing and credit-scoring formulas, as well as analysis of overages and fees.
- Rigorous evaluation of successful fair lending to find out what really works to increase lending to traditionally under-served groups.
My suggestion whether you’re a minority or not is to research your options thoroughly. Don’t just accept what they offer. Compare and shop around.
I enjoy reading DINKs, as James and Miel seem to find interesting topics to write about. This one just caught me eye and I wanted to write a response. I just felt that the author of the book they reviewed gleamed over some important issues. Let me know what you think about the books and its thoughts.
Any ideas on repairing mortgage lending practices, besides the discrimination issue for some? We’re thinking of getting a home within 12 months, so now it’s showing up on a radar a bit more than before.
Photo Credit: Fabio