A comedian performing at the Milwaukee Improv posed a redundant but disingenuous question: Why did the club carry the name Milwaukee if it was located in the exclusively white city of Brookfield?
Having visited Milwaukee, he said, the answer was obvious.
A century and a half ago, Brookfield residents marched to Milwaukee to free an escaped slave from the Milwaukee jail.
The descendants of those abolitionists try to keep African American descendants from moving into their neighborhoods.
It’s one of the reasons Milwaukee is the second most segregated city in the United States.
Indeed, some would suggest that a century after the legal barriers to housing and educational segregation have been eliminated, housing patterns today are determined as much by personal choices as racial impediments.
Different ethnicities gravitate to communities where they feel comfortable, as was illuminated in a national news article a few years ago about local Black middle-class families with the means to move to the suburbs, but who chose instead to “live among our own.”
Poor credit and unstable income are also significant impediments in many cases.
But even those realities ignore the largest pinto elephant in the room—mortgage redlining.
Haven’t heard that cancerous catchall in a while, have you? I can relate since I haven’t written about housing or mortgage bias in a couple of decades.
In fact, while I understand racism will forever taint our society, I had assumed the Fair Housing Council would by this time would require only a part-time staff.
Unfortunately, that’s not the case.
As examples of bigotry have given way in the media to other acts of racial profiling and racism, redlining and mortgage loan rejections continue to stagnate Black empowerment.
Research clearly reveals that African Americans are rejected from securing loans at twice the rate of whites, which is consistent with our plight when seeking other types of loans and insurance.
In fact, according to the research project—“Racial Discrimination in Mortgage Lending: A Call for Transparency”—African Americans are disproportionately refused mortgage loans even when controlling for income.
Conducted by Eylul Tekin, a Ph.D. candidate at Washington University for Clever Real Estate, the shocking—albeit not surprising—research also revealed 52% of the rejected African American applicants were not provided with a reason for the rejection.
Sadly, if you made the mistake of assuming prejudicial attitudes and actions have gone the way of Jesse Jackson’s Afro over the last few decades, guess again.
Quite the contrary.
In fact, you need but note the uptick of racial animosities since ‘Donald the Trumpster’ took office to recognize that Rev. Al Sharpton will remain employed as America’s official tree shaker—at least until his processed hair returns to its natural, nappy state.
Tekin studied the records of 1.7 million mortgage applicants, 1.4 million of whom were White, compared to only 80,442 African Americans.
According to the report, “disparity between White and Black mortgage approval rates is most pronounced in the south; 89% of White applicants are approved in southern states, compared to 76% for African Americans”.
In 2016 (the latest year for figures), only nine percent of White applicants were rejected, compared to 19% of Black applicants of comparable income.
While the rejection rate for Wisconsin was below the national average, that statistic, like most data on the state, is marred by the fact that African Americans only make up 6% of the state population, with the overwhelming majority living in Milwaukee.
Thomas O’Shaughnessy, head researcher, revealed the rejection rate for Black Milwaukeeans was two percentage points higher than the national average.
On the bright/light/white side, it could be far worse, since the report showed only .05% of Black Milwaukeeans tried to secure a mortgage in the target year.
Another factor that impacts the viability of Black homeownership is that a much higher percentage of African Americans are steered toward higher-interest-rate mortgages—what I call the ‘Rent-A-Center Mortgage division.’
As the researchers noted from a study by the National Bureau of Economic Research, “African American and Hispanic mortgage applicants are, respectively, 105% and 79% more likely to use high-cost mortgages for home purchases.
“The study found that ‘differential exposure’ to high-risk lenders combined with ‘differential treatment’ by lenders explains most of the ethnic difference in high-cost mortgage lending.
“In other words, ‘African Americans and Hispanic borrowers are treated differently by lenders and funneled to high-cost mortgages.’
“African American borrowers are also more likely to ‘receive subprime loans at higher costs, possibly contributing to higher foreclosure rates among these borrowers’.”
And while the report doesn’t succinctly put the blame for this travesty at the foot of racism, you can’t see the horned heads of disproportionately poor credit or debt-to-income ratios, because they are obscured by the mass of what appears to be a pretty large elephant in the room.
I say “assume” because, in over half of the reviewed rejection cases, the lenders didn’t report a reason for the rejection!
That loophole not only taints the study but hinders remedies.
As the report detailed:
“While this data would be valuable in assessing lender discrimination, there’s also the question of whether credit scores have inherent bias built into their scoring algorithms against people of color.
“Credit scores are a black box (their term, not mine) with hundreds of variables, and studies have shown that credit score algorithms have a disparate impact on people and communities of color.”
And if you think it’s irrelevant, think about this:
Homeownership not only makes African Americans stakeholders and property taxpayers, but is essential to stable neighborhoods, schools, and communities.
It’s not a coincidence that rental properties are not maintained as well, that neighborhoods deteriorate when they have an abundance of duplexes, and that crime soars.
Civil rights were never about “giving” us anything, but merely equal access and opportunity. But that quest continues to be undermined as long as we are forced to wear tall boots to wade through the dung left by the beast in the darkened room.
Hotep.
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