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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the category “fair housing”

Ben Carson and Fair Housing Laws

nyti.ms/2IfjBuW

An editorial from New York Times

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A Very Good Article About Housing Policy From Brookings

www.brookings.edu/blog/the-avenue/2018/05/02/nine-rules-for-better-housing-policy/

I particularly like that they talk about income subsidy as well.

Segregation in St. Louis-Dismantling the Divide

A report entitled Segregation in St. Louis-Dismantling the Divide is an outstanding document that carefully, accurately, and fairly analyzes the history of housing segregation in St. Louis. The report was prepared by a group of organizations and scholars led by the Metropolitan St. Louis Equal Housing and Economic Opportunity Council. It should be required reading for everyone and hopefully will be a blueprint for action. The website for the report is forthesakeofall.org. Written by Paul Dribin

Fair Housing Law

nyti.ms/2v3uF8n

Former Vice President Walter Mondale presents an excellent discussion on the federal Fair Housing Law of 1968 which was intended to outlaw racial discrimination and segregation in housing. Mr. Mondale presents some very accurate points about the serious flaws in implementing the law by the federal bureaucracy including HUD where I worked. The political consequences are still strong for politicians who support open housing. We do know that living in safe neighborhoods with good schools is the number one things a poor family can do to improve their lives. Written by Paul Dribin

A bad racist housing program

www.theatlantic.com/business/archive/2018/04/rent-to-own-redlining/557588/

This article itemizes a new form of land contract housing sales. It preys on African American people of limited means and marginal credit. People pay monthly but title to the property does not transfer until after a long number of years. The potential buyers build no equity and if they miss a payment they are out with no equity to show for it. These programs were used for blockbusting in Chicago when I grew up. Written by Paul Drib in

The Real Story Behind Racial Disparities in Mortgage Lending

There are numerous articles and discussions about the fact that African American borrowers are rejected at a higher rate that white borrowers. This disparity is present even when adjusting for income. On the face of it, this appears to be overt discrimination.

An important piece of the puzzle is missing from the discussion. That piece is the credit record and history of the borrower. This information is never made available in these studies and provides a more qualitative aspect of mortgage underwriting. Two other equally qualified borrowers will have different underwriting results if one has a negative credit record. Research I have conducted has shown that bad credit is the primary cause of a loan going bad.

Another factor shows this poor credit denies loans. Mortgage loan officers are extremely aggressive and make their fees off of closing loans. They would make a loan to anyone who would qualify. Race plays not factor in these decisions. Written by Paul Dribin

Real Facts Behind Alleged Racial Discrimination in Mortgage Underwriting

Once again articles have appeared alleging racial discrimination in mortgage underwriting. The allegations are very simplistic, they are based on the fact that fewer African Americans than white Americans get approved for mortgage loans even adjusting for income.

There are several key factors that go into underwriting a loan that belie this argument. A huge factor in loan underwriting is the creditworthiness of the borrower. I have conducted research which has shown that a poor credit rating was the biggest predictor of loan default. It makes sense. People could have a lot of money, but if they don’t pay bills, they are a risk. The analyses conducted by fair housing groups don’t take credit history into account. They are not being accurate to state they are comparing like borrowers.

A second reason which supports the argument that we have a credit worthiness problem is the nature of the mortgage business. Mortgage loan officers are hugely competitive and derive their income from closing loans. I can speak from experience they fight aggressively for each deal. They are not going to pass up a commission because they may be prejudiced against people of color.

Underwriting standards need to be constantly reviewed to insure they are fair to all and capture as best they can the experience of racial minorities. We can get better results. But let’s not go in for simplistic analysis. Written by Paul Dribin

Community Reinvestment Act

The Community Reinvestment Act was a piece of legislation passed in the seventies which has had a very positive effect on urban development. This law required all regulated financial institutions to lend in non traditional areas and develop underwriting standards to allow this to happen. It has resulted in millions of minorities and minority communities receiving home loans. The program has also made money for banks and contrary to conservative ideology was not the cause of the housing collapse.

The Trump administration is trying to weaken the law. With everything else going on, this has not received much attention. We should be paying attention to this whole issue. Written by Paul Dribin

Fair Housing Complaints

Paraquad and the Equal Housing Opportunity Center have filed complaints against various apartment complexes in the area over potential violations of the Fair Housing Act. The violations relate to lack of handicap accessibility at certain market rate projects in the area. Without knowing the exact circumstances it is difficult for me to comment. Written by Paul Dribin

HUD to Defund Fair Housing Grants in Missouri

Missouri passed a law about six months ago which made filing a discrimination or fair housing complaint more difficult. Many in the know advised against it primarily for moral reasons, but also because of the potential for lawsuits and possibility of listing federal funding. Well, the predictions have come true. HUD has written that if the law is not changed by March 2018 federal funding for fair housing enforcement will be terminated. That is because the state law is no longer “substantially equivalent” to the federal law. It would be just deserts if Amazon opted not to come here due to our redneck ways. Written by Paul Dribin

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