Redlining…that old fashioned sounding thing that is still happening…hopefully due to the lag of new ideas replacing old habits…It’s not OVERT racism: saying out loud that one person is better than another because of the color of their skin. It’s COVERT racism: you say out loud that everyone matters, but behind the scenes you do things to treat a person of color as less than, or you take actions to bolster white privilege.
Rewind to The Housing Crisis in 2008…
What role did race play? Hypothesis: the wealth disparity correlates to race, with minorities making less…and lower income households were the first to face foreclosure, and suffer from lower home prices?
Housing bubble- pop! Pop Quiz: Mortgages.
Decline in home prices + high household debt (MBS + CDO) people selling for less than they owe = subprime mortgage crisis (higher interest rates – lower credit or capacity to pay = default)
In our local news the Rapidian in an article called Seeing Red…”loans made to African-Americans were down by 65.9% while loans to whites were only down by 21.4% in the city.” That’s inequality.
How does that happen?!
Once Again, It’s Called Redlining. Here Is HOW It Is Done…Here Is a 2016 Example:
His bio says…”common sense approach to lending…
I am experienced in all conforming and portfolio products.”
You know what has been “common sense” in the last century? Keeping minorities in minority neighborhoods…lending to whites and not as much to minorities. See percentages above. Or go drive around Grand Rapids.
With experience it would be possible to stay within legal bounds but still accomplish a goal of covert discrimination. Mr. Aldrich had a young lady come to him with a mortgage package. She’s mixed – with mixed parents, and from Grand Rapids. She’s working full time at a job that pays 30,000-40,000 per year. She qualifies for a 100,000 mortgage. She won a bid on a house for 85,000…AND she wasn’t the highest bidder…but her realtor wrote a letter explaining this woman’s line of work, how hard she works, how she has a daughter she’s raising with full custody.
Mr. Aldrich wasn’t the first loan officer to look at her application and let it sit…and sit…and sit…on his desk. The last guy realized really late in the game that his bank couldn’t take the grant she had for her down payment…that’s why things were taking so long…Because she was not able to save thousands of dollars due to lower income, so she qualified for a grant…yet the grant barred her from service.
Keeping the down, down. Sound familiar? We feel your pain, woman.
So – Art says, “Sure..” We deal with that grant’s red tape…and then he Redlined her. He did not touch her application while telling her he was…while his superiors had been contacted by the realtor…assuring her the same…still…throwing a closing day further into the future…near 60 days…
This woman, business professional, calm-cool-collected walks in, “I’ve been displaced from my home, and my car broke down. It’s totaled because of the cost of parts, so I am trying to look into a car loan and I cannot get one because this mortgage is still in process… where is it at in the process? Can I talk to someone?” And the tellers say, “…are busy. You’ll have to come back later.” She can make eye-contact with Mr. Aldrich. He can hear her. He ignores her.
Mr. Aldrich did nothing. And that is his crime, and that’s why it’s hard to pin him for “nothing” and probably why it keeps happening! It’s easy.
Her story has a happy ending…she switched banks, who are aware of these impropr, subtle, yet cruel business practices – awareness – acknolwedgement – compassion –
She got her paperwork back from the third bank in a mere two weeks, and the seller’s also aware – and compassionate waited.
Sometimes redlining of this sort works because of competition – someone else gets there first, first come first served.
The first will be last…I’ve heard somewhere…
Here’s News Though, Even If You Have The Best Intentions…You Can Still Be Guilty of Redlining
Art Aldrich could be the most stand up white male, grandfather, tithes a lot…loves black people..but, Art Aldrich’s intentions do NOT matter, his beliefs do NOT matter…his (non-action) actions matter. He is guilty of managerial racism…even if somehow you “didn’t know” the woman’s race…she is what she is and it is what it is for that reason. That’s not right.