Last night, Reveal (from the Center for Investigative Reporting) put together a panel for Camden residents. Reveal has been doing these panels nationally to help residents start to combat discrimination that Reveal has uncovered in mortgage lending across the country — including disparate rates of successful mortgages in Camden County, NJ.
The panel covered the research, which we excerpt here. That research shows that a Black mortgage applicant was 2.6 times more likely to be denied a mortgage (controlling for the quality of the application) than a similar white applicant. Ugh.
The panel dug into ways that individuals and communities can protect themselves from such discrimination. That section of the video starts at 1:03:00 below. And I wanted to touch on a few of those techniques here:
Live from Reveal’s Camden event on modern day redlining. Join us and let us know what you think.
Posted by Blue Jersey on Monday, March 19, 2018
1) Find a (free) HUD counseling agency to help you through the mortgage process so that you have an advocate through the process.
2) Apply for multiple mortgages to avoid discriminatory loans. This one is a bit tricky — there’s a limited window to apply for mortgages without hurting your credit score — but if you apply within the same window, it counts as one “pull” for your credit score, and it can help you avoid changes in the terms late in the process that risk your ability to close on the house.
3) Work on your credit before the process starts. There are lots of ways to improve your credit score — it makes the most sense to do that early so you’re in the strongest position possible when you look to buy.
4) Avoid an FHA loan if your credit score supports a private loan. FHA loans can be a good tool for those with low credit scores (580 or so), but if you’re in the mid-to-upper 600s, FHAs are more expensive because of their insurance structure. One of the ways the sector discriminates is by assuming people of color need FHA loans, and steering them towards that product, even though it’s more expensive.
5) Fight back against discriminatory banks. Some attendees recommended “voting with your dollars” and pulling money out of discriminatory banks. Panelists also noted that banks are most vulnerable when they are merging — so concerted efforts to file complaints when banks merge can lead to recompense for communities that are being discriminated against.
6) Lastly, choose your real estate agent carefully. “Steering”, where the real estate agent contributes to segregation by pointing homebuyers of color only towards already segregated communities, can be a very dangerous form of discrimination as well.
Check out the panel, and tell us what you think!