A good credit score did not protect Latino and black borrowers
In recent years, Latino and African American consumers with good credit scores of 660 and higher have too often ended up with high-interest-rate mortgages—mortgages that are supposed to go to risky borrowers. This week’s Economic Snapshot illustrates that from 2004 to 2008, only 6.2 percent of white borrowers with credit scores of 660 and above ended up with higher-rate mortgages. Latinos and blacks with good credit scores were at least three times as likely to end up with higher-rate mortgages.
“Discriminatory housing practices are one reason why our country needs a strong Consumer Financial Protection Bureau,” said Algernon Austin, director of EPI’s Race, Ethnicity, and the Economy program.
Focusing on Dr. Martin Luther King Jr.’s pursuit of economic justice for all Americans, Forbes contributor Joel Kotkin stressed the significant amount of work that remains to be done, particularly with respect to the African American community. “While African-Americans make up 12% of the nation’s population, they account for 21% of the nation’s unemployed. Unemployment for black men stands at a staggeringly high 19.1%, and the Economic Policy Institute estimates that overall black unemployment will remain well above 10% till at least 2014,” wrote Kotkin.
The Grio columnist Monique W. Morris highlighted Austin’s research showing that African American under-and unemployment statistics dwarf their white counterparts both in good economic times and downturns. Morris wrote, “Research by Algernon Austin at the Economic Policy Institute has demonstrated the consistently high rates of under- and unemployment among African-Americans as evidence of a ‘permanent recession.’ This is true, he argues, when the economy is strong. So, when the rest of the nation is experiencing a recession, what are African-Americans experiencing? That’s right, a depression.”
- A jobs-centered approach to African American community development : The crisis of African American unemployment requires federal intervention (scoppcanton.wordpress.com)
- Discrimination settlement holds subprime lenders accountable (thegrio.com)
- Class Discussion and In-Class Introductory Quiz: Your Credit Score (artkeown.com)