Why should RED-LINING be illegal?

[Politesse]

This is the same as "Red-lining." It's not about race, or about your religion or sex preference. It's about higher risk for that insurance or loan you're applying for.

So you wouldn't mind being turned down for a loan on the basis of the neighborhood you currently live in, even if you could otherwise prove yourself to be creditworthy? "Fair's fair", you'd say, and just go back to living in the slums because too many of your neighbors are Mexican and that strikes you as a reasonable rationale for trapping you there indefintely?

 

[Harry Bosch]

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with.

That's not what it meant around here several decades ago.
I don't think it meant that most places in the USA.

Realtors and banks had to do business. Showing or financing homes to people on the wrong side of the redline for their race would put them out of business. That started changing by 1975. By 1985, such overt racism would destroy your business as effectively as not doing so would have done in 1965.

Society has changed hugely in the last few decades. "Redlining" has become a dogwhistle word for one variant of social extremism.
Tom

Tom: I'm not sure that I'm following you. I'm a reformed banker. I was also an FDIC regulator for awhile. Redlining is literally circling a neighborhood that a bank wouldn't want to do business with. Often times it was because the homes were older (not as long of an economic life); sometimes in hazardous spill areas, lower income areas, minority areas. Fair lending act regulated redlinning. IOW, it's not allowed anymore.

 

[Toni]

It was responsive but I realized a moment after I posted that it probably could be seen as less than kind, so I deleted it. In the meantime, you responded.

It wasn't that it was unkind.
It was the flat out falsehood that I noticed.
I've come to expect that.
Tom

As I have come to expect you to accuse others of falsehood rather than actually engage in a discussion. If you believed I was mistaken, you could have told me how I was mistaken. Instead, you prefer to level an accusation of posting a falsehood.

I understand completely.

 

[Toni]

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with.

That's not what it meant around here several decades ago.
I don't think it meant that most places in the USA.

Realtors and banks had to do business. Showing or financing homes to people on the wrong side of the redline for their race would put them out of business. That started changing by 1975. By 1985, such overt racism would destroy your business as effectively as not doing so would have done in 1965.

Society has changed hugely in the last few decades. "Redlining" has become a dogwhistle word for one variant of social extremism.
Tom

Tom: I'm not sure that I'm following you. I'm a reformed banker. I was also an FDIC regulator for awhile. Redlining is literally circling a neighborhood that a bank wouldn't want to business. Often times it was because the homes were older (not as long economic life); sometimes in hazardous spill areas, lower income areas, minority areas. Fair lending act regulated redlinning. IOW, it's not allowed anymore.

I realize that de jure redlining is not allowed. Do you disagree that de facto redlining still occurs? I know it's a little long but the article I posted in #34 about recent discrimination based on race.

https://www.chicagotribune.com/business/ct-biz-modern-day-redlining-20180215-story.htmlNew Jersey-based TD Bank, which denied a higher proportion of black and Latino applicants than any other major lender, said it "makes credit decisions based on each Customer's credit profile, not on factors such as race or ethnicity."

Reveal's analysis included all records publicly available under the Home Mortgage Disclosure Act, covering nearly every time an American tried to buy a home with a conventional mortgage in 2015 and 2016. It controlled for nine economic and social factors, including an applicant's income, the amount of the loan, the ratio of the size of the loan to the applicant's income and the type of lender, as well as the racial makeup and median income of the neighborhood where the person wanted to buy property.

 

[Bronzeage]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all.

I am speaking of flood insurance.

I'm not sure why you are comparing flood insurance to racial segregation.
One is risk management. One is socially enforced race segregation.
Tom

It's not opaque. Land in flood plains was "redlined". This was economically detrimental to home owners in bv these areas, who were mostly middleclass white people. The government devised a program which enticed/coerced private insurance providers to act contrary to normal market forces.
The redline in this thread concerns the difficulty of obtaining insurance in areas where the demographic is not white, which depresses property values and investment. Lower values and investment reduces tax revenues, which reduces government services and it becomes a death spiral.
The flood insurance program shows how government intervention in the market functions to benefit a specific constituency.

It's pointless to make a chicken or the egg argument over redlining area with a non white population. It's an economic issue and the government has proven itself capable of addressing this problem when the right people demand it.

 

[Harry Bosch]

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with.

That's not what it meant around here several decades ago.
I don't think it meant that most places in the USA.

Realtors and banks had to do business. Showing or financing homes to people on the wrong side of the redline for their race would put them out of business. That started changing by 1975. By 1985, such overt racism would destroy your business as effectively as not doing so would have done in 1965.

Society has changed hugely in the last few decades. "Redlining" has become a dogwhistle word for one variant of social extremism.
Tom

Tom: I'm not sure that I'm following you. I'm a reformed banker. I was also an FDIC regulator for awhile. Redlining is literally circling a neighborhood that a bank wouldn't want to business. Often times it was because the homes were older (not as long economic life); sometimes in hazardous spill areas, lower income areas, minority areas. Fair lending act regulated redlinning. IOW, it's not allowed anymore.

I realize that de jure redlining is not allowed. Do you disagree that de facto redlining still occurs? I know it's a little long but the article I posted in #34 about recent discrimination based on race.

https://www.chicagotribune.com/business/ct-biz-modern-day-redlining-20180215-story.htmlNew Jersey-based TD Bank, which denied a higher proportion of black and Latino applicants than any other major lender, said it "makes credit decisions based on each Customer's credit profile, not on factors such as race or ethnicity."

Reveal's analysis included all records publicly available under the Home Mortgage Disclosure Act, covering nearly every time an American tried to buy a home with a conventional mortgage in 2015 and 2016. It controlled for nine economic and social factors, including an applicant's income, the amount of the loan, the ratio of the size of the loan to the applicant's income and the type of lender, as well as the racial makeup and median income of the neighborhood where the person wanted to buy property.

Well, the problem with redlinning is that it excluded many "good borrower's" from getting a loan. Residential lending criteria today is based on debt to income, credit score, appraised value, and etc. If someone doesn't have a strong enough debt to income, that means that they don't have the cash flow to service their loan adequately. A bank should never make a loan to a client who can't afford the loan. Same thing with credit score. If someone has poor credit, you're just setting them up to fail by financing a home to them. Appraisals are a different story. But at the end of the day, approving a loan to a customer who doesn't have the capacity to afford it or pay it back is doing them a great disservice. The worst mistake that I ever made as a commercial banker was financing a project that was just too tight. I loved the owners. Incredible family. But the project failed. It was too tight at the beginning. And they went bankrupt.

 

[Alcoholic Actuary]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all. Most of these people are middle class whites, but a few of them are considered wealthy. The wealthy are less affected and the insurance allows them to enjoy a high standard of living in a high risk area. I am speaking of flood insurance.

This is a case where the red lines are drawn by the government because left to themselves, insurance companies would not offer flood insurance of any kind. The government regulates the flood insurance market, so that rates are kept artificially low and any single provider is not exposed to excess risk.

The result is an interesting economic model in play. Flood insurance allows land to be developed which otherwise would not be economically viable for housing, due to the risk of losing it all in a given period of time. This development changes the geography enough to increase the risk of previously marginal areas, so overall flood risk increases. Some properties have been declared 50% (and higher) losses 3 or 4 times in the past 40 years.

None of this would have happened if not for government regulation which created a insurance market for high risk properties, by drawing a red line around an area and requiring insurance companies to sell flood insurance to any who can afford it. A home owner is not required to be insured, but no bank will finance an uninsured property, which drastically affects market price.

So, if red lining is a problem, the government has shown it has a remedy. It just depends on who needs to be remediated.

I don't think that's exactly right. NFIP is a government program that takes the premium and pays the losses. There is still no insurance 'market' for flood except for gaps in what the government doesn't cover. The economic model you are describing is a government subsidy to develop land that would otherwise be too risky to occupy.

There is still government regulation all over the insurance industry - particularly to personal lines carriers. It's just different than how flood insurance works. And if the current climate change storm trends continue, it will be increasingly difficult to find ANY kind of storm coverage from Oklahoma to Virgina down to the gulf.

aa

 

[Alcoholic Actuary]

Crime Score and Credit Score are routinely used in insurance and lending underwriting standards and rating. The redlining occurs when those same criteria are used as a substitute or proxy for race. I've always been on the other side of that argument - I'd love to insure the drug lord's house:

1. I can get more premium if it's in a higher crime area
2. No one is going to rob the drug lord
3. If someone did, they have "internal controls" to deal with it other than filing a claim and drawing attention to themselves

aa

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with. It was generally older areas with older homes. It was thought that these homes couldn't support a 30 year economic life (banks like to finance assets that have a longer life than the term of their loan). These areas tended to be owned by minorities.

I'm with you on that, but what about the 'new' redlining? I have data analytics that tell me how to circle the neighborhood now. Effective risk management tool or extension of racist/classist policies?

aa

 

[Toni]

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with.

That's not what it meant around here several decades ago.
I don't think it meant that most places in the USA.

Realtors and banks had to do business. Showing or financing homes to people on the wrong side of the redline for their race would put them out of business. That started changing by 1975. By 1985, such overt racism would destroy your business as effectively as not doing so would have done in 1965.

Society has changed hugely in the last few decades. "Redlining" has become a dogwhistle word for one variant of social extremism.
Tom

Tom: I'm not sure that I'm following you. I'm a reformed banker. I was also an FDIC regulator for awhile. Redlining is literally circling a neighborhood that a bank wouldn't want to business. Often times it was because the homes were older (not as long economic life); sometimes in hazardous spill areas, lower income areas, minority areas. Fair lending act regulated redlinning. IOW, it's not allowed anymore.

I realize that de jure redlining is not allowed. Do you disagree that de facto redlining still occurs? I know it's a little long but the article I posted in #34 about recent discrimination based on race.

https://www.chicagotribune.com/business/ct-biz-modern-day-redlining-20180215-story.htmlNew Jersey-based TD Bank, which denied a higher proportion of black and Latino applicants than any other major lender, said it "makes credit decisions based on each Customer's credit profile, not on factors such as race or ethnicity."

Reveal's analysis included all records publicly available under the Home Mortgage Disclosure Act, covering nearly every time an American tried to buy a home with a conventional mortgage in 2015 and 2016. It controlled for nine economic and social factors, including an applicant's income, the amount of the loan, the ratio of the size of the loan to the applicant's income and the type of lender, as well as the racial makeup and median income of the neighborhood where the person wanted to buy property.

Well, the problem with redlinning is that it excluded many "good borrower's" from getting a loan. Residential lending criteria today is based on debt to income, credit score, appraised value, and etc. If someone doesn't have a strong enough debt to income, that means that they don't have the cash flow to service their loan adequately. A bank should never make a loan to a client who can't afford the loan. Same thing with credit score. If someone has poor credit, you're just setting them up to fail by financing a home to them. Appraisals are a different story. But at the end of the day, approving a loan to a customer who doesn't have the capacity to afford it or pay it back is doing them a great disservice. The worst mistake that I ever made as a commercial banker was financing a project that was just too tight. I loved the owners. Incredible family. But the project failed. It was too tight at the beginning. And they went bankrupt.

That’s not what I was talking about. I’m not talking about buyers who are financially unable to qualify for the loan. I’m talking about being offered different t rates compared to people whose skin tone or name suggested someone not sufficient fly Anglo. Appraisals, as you mentioned, are another thing—and another opportunity for lenders to, consciously or not, keep certain prospective home buyers out of the market.

 

[Bronzeage]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all. Most of these people are middle class whites, but a few of them are considered wealthy. The wealthy are less affected and the insurance allows them to enjoy a high standard of living in a high risk area. I am speaking of flood insurance.

This is a case where the red lines are drawn by the government because left to themselves, insurance companies would not offer flood insurance of any kind. The government regulates the flood insurance market, so that rates are kept artificially low and any single provider is not exposed to excess risk.

The result is an interesting economic model in play. Flood insurance allows land to be developed which otherwise would not be economically viable for housing, due to the risk of losing it all in a given period of time. This development changes the geography enough to increase the risk of previously marginal areas, so overall flood risk increases. Some properties have been declared 50% (and higher) losses 3 or 4 times in the past 40 years.

None of this would have happened if not for government regulation which created a insurance market for high risk properties, by drawing a red line around an area and requiring insurance companies to sell flood insurance to any who can afford it. A home owner is not required to be insured, but no bank will finance an uninsured property, which drastically affects market price.

So, if red lining is a problem, the government has shown it has a remedy. It just depends on who needs to be remediated.

I don't think that's exactly right. NFIP is a government program that takes the premium and pays the losses. There is still no insurance 'market' for flood except for gaps in what the government doesn't cover. The economic model you are describing is a government subsidy to develop land that would otherwise be too risky to occupy.

There is still government regulation all over the insurance industry - particularly to personal lines carriers. It's just different than how flood insurance works. And if the current climate change storm trends continue, it will be increasingly difficult to find ANY kind of storm coverage from Oklahoma to Virgina down to the gulf.

aa

Close enough. There is no economic incentive for the private market to provide flood insurance because the at risk group is too small and too well defined. Banks require flood insurance before they issue a loan to anyone in the "Hundred Year" flood plain. This greatly increases the premium paying base. Development which increases the rate of runoff has expanded this plain, which has led to more regulation of land use.
Government flood insurance allows people to invest in property which no private insurer would touch, in other words, land that was reclined long before there was such a term.

If it works for geographically unviable land, it would work for the economically unviable land as well.

 

[Alcoholic Actuary]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all. Most of these people are middle class whites, but a few of them are considered wealthy. The wealthy are less affected and the insurance allows them to enjoy a high standard of living in a high risk area. I am speaking of flood insurance.

This is a case where the red lines are drawn by the government because left to themselves, insurance companies would not offer flood insurance of any kind. The government regulates the flood insurance market, so that rates are kept artificially low and any single provider is not exposed to excess risk.

The result is an interesting economic model in play. Flood insurance allows land to be developed which otherwise would not be economically viable for housing, due to the risk of losing it all in a given period of time. This development changes the geography enough to increase the risk of previously marginal areas, so overall flood risk increases. Some properties have been declared 50% (and higher) losses 3 or 4 times in the past 40 years.

None of this would have happened if not for government regulation which created a insurance market for high risk properties, by drawing a red line around an area and requiring insurance companies to sell flood insurance to any who can afford it. A home owner is not required to be insured, but no bank will finance an uninsured property, which drastically affects market price.

So, if red lining is a problem, the government has shown it has a remedy. It just depends on who needs to be remediated.

I don't think that's exactly right. NFIP is a government program that takes the premium and pays the losses. There is still no insurance 'market' for flood except for gaps in what the government doesn't cover. The economic model you are describing is a government subsidy to develop land that would otherwise be too risky to occupy.

There is still government regulation all over the insurance industry - particularly to personal lines carriers. It's just different than how flood insurance works. And if the current climate change storm trends continue, it will be increasingly difficult to find ANY kind of storm coverage from Oklahoma to Virgina down to the gulf.

aa

Close enough. There is no economic incentive for the private market to provide flood insurance because the at risk group is too small and too well defined. Banks require flood insurance before they issue a loan to anyone in the "Hundred Year" flood plain. This greatly increases the premium paying base. Development which increases the rate of runoff has expanded this plain, which has led to more regulation of land use.
Government flood insurance allows people to invest in property which no private insurer would touch, in other words, land that was reclined long before there was such a term.

If it works for geographically unviable land, it would work for the economically unviable land as well.

Correct, but I think that Fannie Mae and Freddie Mac already tried to provide this kind of economic backstop to 'unviable land' (similar to the NFIP insurance backstop) but were met with less than stellar results. Perhaps not enough intrusion?

aa

 

[Bronzeage]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all. Most of these people are middle class whites, but a few of them are considered wealthy. The wealthy are less affected and the insurance allows them to enjoy a high standard of living in a high risk area. I am speaking of flood insurance.

This is a case where the red lines are drawn by the government because left to themselves, insurance companies would not offer flood insurance of any kind. The government regulates the flood insurance market, so that rates are kept artificially low and any single provider is not exposed to excess risk.

The result is an interesting economic model in play. Flood insurance allows land to be developed which otherwise would not be economically viable for housing, due to the risk of losing it all in a given period of time. This development changes the geography enough to increase the risk of previously marginal areas, so overall flood risk increases. Some properties have been declared 50% (and higher) losses 3 or 4 times in the past 40 years.

None of this would have happened if not for government regulation which created a insurance market for high risk properties, by drawing a red line around an area and requiring insurance companies to sell flood insurance to any who can afford it. A home owner is not required to be insured, but no bank will finance an uninsured property, which drastically affects market price.

So, if red lining is a problem, the government has shown it has a remedy. It just depends on who needs to be remediated.

I don't think that's exactly right. NFIP is a government program that takes the premium and pays the losses. There is still no insurance 'market' for flood except for gaps in what the government doesn't cover. The economic model you are describing is a government subsidy to develop land that would otherwise be too risky to occupy.

There is still government regulation all over the insurance industry - particularly to personal lines carriers. It's just different than how flood insurance works. And if the current climate change storm trends continue, it will be increasingly difficult to find ANY kind of storm coverage from Oklahoma to Virgina down to the gulf.

aa

Close enough. There is no economic incentive for the private market to provide flood insurance because the at risk group is too small and too well defined. Banks require flood insurance before they issue a loan to anyone in the "Hundred Year" flood plain. This greatly increases the premium paying base. Development which increases the rate of runoff has expanded this plain, which has led to more regulation of land use.
Government flood insurance allows people to invest in property which no private insurer would touch, in other words, land that was reclined long before there was such a term.

If it works for geographically unviable land, it would work for the economically unviable land as well.

Correct, but I think that Fannie Mae and Freddie Mac already tried to provide this kind of economic backstop to 'unviable land' (similar to the NFIP insurance backstop) but were met with less than stellar results. Perhaps not enough intrusion?

aa

The sub prime mortgage debacle would need it's own thread.

 

[Harry Bosch]

Technically, redlining was literally a bank circling a neighborhood on a map that they didn't want to do business with.

That's not what it meant around here several decades ago.
I don't think it meant that most places in the USA.

Realtors and banks had to do business. Showing or financing homes to people on the wrong side of the redline for their race would put them out of business. That started changing by 1975. By 1985, such overt racism would destroy your business as effectively as not doing so would have done in 1965.

Society has changed hugely in the last few decades. "Redlining" has become a dogwhistle word for one variant of social extremism.
Tom

Tom: I'm not sure that I'm following you. I'm a reformed banker. I was also an FDIC regulator for awhile. Redlining is literally circling a neighborhood that a bank wouldn't want to business. Often times it was because the homes were older (not as long economic life); sometimes in hazardous spill areas, lower income areas, minority areas. Fair lending act regulated redlinning. IOW, it's not allowed anymore.

I realize that de jure redlining is not allowed. Do you disagree that de facto redlining still occurs? I know it's a little long but the article I posted in #34 about recent discrimination based on race.

https://www.chicagotribune.com/business/ct-biz-modern-day-redlining-20180215-story.htmlNew Jersey-based TD Bank, which denied a higher proportion of black and Latino applicants than any other major lender, said it "makes credit decisions based on each Customer's credit profile, not on factors such as race or ethnicity."

Reveal's analysis included all records publicly available under the Home Mortgage Disclosure Act, covering nearly every time an American tried to buy a home with a conventional mortgage in 2015 and 2016. It controlled for nine economic and social factors, including an applicant's income, the amount of the loan, the ratio of the size of the loan to the applicant's income and the type of lender, as well as the racial makeup and median income of the neighborhood where the person wanted to buy property.

Well, the problem with redlinning is that it excluded many "good borrower's" from getting a loan. Residential lending criteria today is based on debt to income, credit score, appraised value, and etc. If someone doesn't have a strong enough debt to income, that means that they don't have the cash flow to service their loan adequately. A bank should never make a loan to a client who can't afford the loan. Same thing with credit score. If someone has poor credit, you're just setting them up to fail by financing a home to them. Appraisals are a different story. But at the end of the day, approving a loan to a customer who doesn't have the capacity to afford it or pay it back is doing them a great disservice. The worst mistake that I ever made as a commercial banker was financing a project that was just too tight. I loved the owners. Incredible family. But the project failed. It was too tight at the beginning. And they went bankrupt.

That’s not what I was talking about. I’m not talking about buyers who are financially unable to qualify for the loan. I’m talking about being offered different t rates compared to people whose skin tone or name suggested someone not sufficient fly Anglo. Appraisals, as you mentioned, are another thing—and another opportunity for lenders to, consciously or not, keep certain prospective home buyers out of the market.

Well, lenders have no control over appraisals. Federal regulation does not allow the banker to talk to the appraiser. Big separation there. Yes, offering a higher rate to someone with a different skin color is wrong. It's very bad for that bank also. But people need to shop around. There also is a very large group of minority bankers that people can seek out. I and several other minority bankers were in a group that presented directly to minority businesses. But if the bank that I worked out had a slightly higher rate than the white banker at the competing bank, people would go to that competing bank in a drop of a hat. So, it goes both ways sometimes.

 

[Loren Pechtel]

That segment from John Oliver includes a lot of information on red-lining and how minorities were concentrated in areas that were subject to devaluation through industrial development, dumping, land seizures, etc. It is pertinent to lumpenproletariat's questions.

Did you watch the video? What did you think of that proposed pipeline in Memphis meandering through the predominantly black neighborhoods instead of taking the much shorter direct route through the predominantly white ones? The cost of construction per mile of pipeline is very high. What was it about going through the black neighborhoods that made it worth the added construction cost?

I watched that video. Among sad stories: The soil in East Chicago is too poisonous for children to play in; this was known for many years before residents were informed.

Lumpenproletariat, please provide the definition of red-lining that you are using. I don't want to get into a multipage discussion of the illegality of racial discrimination and the Constitution's purpose to "promote the general Welfare" only to discover that you aren't using the common one.

There used to be very real issues with redlining. However, these days the discrimination cops need cases to justify their jobs.

It's true that relevant players are motivated by love of money rather than hatred of blacks. But institutional racism still acts. One stat from the John Oliver segment is that Blacks earning $200,000 are exposed to more air pollution than Whites earning $25,000. So the racial income gap, while itself egregious, is not the full story.

Loren, have you watched the John Oliver segment?

Nothing is making them stay there.

 

[Loren Pechtel]

I am quite familiar with redlining. I have many friends who either pay a large amount for insurance, or sometimes decide they can't afford it at all.

I am speaking of flood insurance.

I'm not sure why you are comparing flood insurance to racial segregation.
One is risk management. One is socially enforced race segregation.
Tom

You don't think that socially enforced race segregation is dressed up in risk management in order for white bankers and realtors and neighborhoods to feel secure and not 'racist?'

There's no enforced race segregation. And floods don't care about your skin color.

 

[Trausti]

Nothing is making them stay there.

Truly. Whites making $25K are probably living in mobile homes. Surely Blacks making $200k can do the same if they wanted the clean air.

 

[Loren Pechtel]

Lumpenproletariat, please provide the definition of red-lining that you are using. I don't want to get into a multipage discussion of the illegality of racial discrimination and the Constitution's purpose to "promote the general Welfare" only to discover that you aren't using the common one.

There used to be very real issues with redlining. However, these days the discrimination cops need cases to justify their jobs.

Thus we get things like the claims of redlining some years back--paying no attention to the fact that what was going on makes more sense as the mortgage bankers considering another factor: expected appreciation.

Okay, nothing like self-fulfilling prophecy.

Which still doesn't address my point that it's the simplest assumption required to get a consistent picture.

Except the part where a bank is saying they won't loan money to the owner because in the future they won't see as much appreciation in the value of property because of the owner because of the race of the owner. It is a self-fulfilling prophecy.

Except it isn't. It has no relationship to race, only to location. Locally it's exactly the area that is the part of town I certainly wouldn't go out at night and the lowest appreciation.

 

[Loren Pechtel]

Except the part where a bank is saying they won't loan money to the owner because in the future they won't see as much appreciation in the value of property because of the owner It is a self-fulfilling prophecy.

Has this happened, in the last 30 years?
"because of the race of the owner."?

I don't think so. I think you're buying a bunch of crap from CRT proponents.
Tom

Loren isn't much of a CRT'er. He stated it, not me.

No, you jumped to a conclusion that's not valid.

 

[Loren Pechtel]

Maybe you don’t understand what redlining means.

Modern-day redlining: How banks block people of color from homeownership

Fifty years after the federal Fair Housing Act banned racial discrimination in lending, African Americans and Latinos continue to be routinely denied

www.chicagotribune.com

This is truly worth the read. Unfortunately my ability to cut and paste is really limited at the moment.

Sorry, but that article is long on disparate impact = discrimination and short on documentation.

"I had a fair amount of savings and still had so much trouble just left and right," said Rachelle Faroul, a 33-year-old black woman who was rejected twice by lenders when she tried to buy a brick row house close to Malcolm X Park in Philadelphia, where African Americans were 2.7 times as likely as whites to be denied a conventional mortgage.

But no evidence about qualifications. Those who have little experience with the mortgage process are a lot more likely to be denied--because they don't know the things that will trip them up. The experienced people are much more likely to know what will stop them and not try in the first place if they won't qualify.

No matter their location, loan applicants told similar stories, describing an uphill battle with loan officers who they said seemed to be fishing for a reason to say no.

Duh! That's their job! They are making sure there is no reason to say no.

When Faroul applied for a loan in April 2016, she thought she was an ideal candidate. She holds a degree from Northwestern University, had a good credit score and estimates she was making $60,000 a year while teaching computer programming as a contractor for Rutgers University. Still, her initial loan application was denied by Philadelphia Mortgage Advisors, an independent broker that made nearly 90 percent of its loans to whites in 2015 and 2016.

"I'm sorry," broker Angela Tobin wrote to Faroul in an email. Faroul's contract income wasn't consistent enough, she said. So Faroul got a full-time job at the University of Pennsylvania managing a million-dollar grant.

Keyword: Contractor

The rules are more strict for those who don't have a standard paycheck.

Eventually, an unpaid $284 electric bill appeared on Faroul's credit report. She paid the bill right away, but it still tanked her credit score, and the bank said it couldn't move forward.

Duh, again! Paying the bill doesn't make the credit ding go away. If you can't even keep your finances straight while applying why do you think they should give you a mortgage?

The loan officer had "completely stopped answering Rachelle's phone calls, just ignored all of them," Franz said. "And then I called, and he answered almost immediately. And is so friendly."

Yet another duh! Why would a loan officer waste time on an application that had already been rejected?

 

[Loren Pechtel]

Crime Score and Credit Score are routinely used in insurance and lending underwriting standards and rating. The redlining occurs when those same criteria are used as a substitute or proxy for race. I've always been on the other side of that argument - I'd love to insure the drug lord's house:

1. I can get more premium if it's in a higher crime area
2. No one is going to rob the drug lord
3. If someone did, they have "internal controls" to deal with it other than filing a claim and drawing attention to themselves

aa

There's basically zero risk of a theft claim but you could get a nasty payout from someone taking out the drug lord.

And with insurance the companies are generally required to tell the state how premiums are set. They'll have a hard time discriminating on race, although some things may end up showing a racial pattern anyway.