Brian McNeill writes in the Progress today about the alarming new study that black Charlottesville-area homeowners are substantially more likely to have a high-cost mortgage than whites. Unfortunately, what McNeill found is mostly stonewalling. The Mortgage Bankers Association says that this is “oversimplifying a complex issue,” which may well be true, but they fail to provide a more complex description that would explain things. Charlottesville-area lenders wouldn’t talk to McNeill. And the Virginia Mortgage Lenders Association both says she doesn’t know and guesses the problem comes from out-of-state firms, which just sounds like wishful thinking. The only particularly useful answer comes from the Virginia Poverty Law Center, which points out that subprime lenders “market themselves to black communities by advertising on hip-hop radio stations and urban-focused television stations,” though even that falls short without knowing whether that’s taking place in Charlottesville and, if so, if it’s happening at a rate greater than anywhere else in the country.
It’s not McNeill’s fault that mortgage brokers aren’t eager to talk about racial disparity in their lending, of course, but it remains that a symptom has been identified, but we just can’t locate its cause.
I know there are the scoundrels in the mortgage business. The worst one I know of was a non-white who preyed on anyone, regardless of color. He would get massive phone lists of local people with bad credit, call them and arm twist them into the most outrageous refinances. He made up to forty grand a month this way, mostly to finance a prodigious crack addiction. He would even make deals while in prison, calling from the yard with a cell phone, having his mother show up at closing to make sure the suckers signed the loan docs.
He didn’t care about race. Im his own twisted way, he actually thought he was helping his clients. There were only two things that his victims shared: gullibility and naiveté.
All of which, I have to say, reminds me very much of the “We Buy Houses” scams.