Speaker 1: Hi, it's West Kasova. We're taking a break today for
Speaker 1: the Juneteenth holiday in the US. Here's a past show
Speaker 1: you might have missed and an update after this episode.
Speaker 1: Based on a Bloomberg investigation aired last year, Wells Fargo
Speaker 1: pledged another one hundred million dollars to help aspiring black
Speaker 1: home buyers. However, it also said it was dropping a
Speaker 1: twenty seventeen goal to create two hundred and fifty thousand
Speaker 1: new black homeowners in America over a decade, and would
Speaker 1: instead take a different approach without a specific goal. Thanks
Speaker 1: so much for listening. We'll be back tomorrow with another
Speaker 1: Big Take. It's the Big Take from Bloomberg News and iHeartRadio.
Speaker 1: I'm West Ksova today. What happened to that big promise
Speaker 1: banks made to help Black Americans buy homes? One big
Speaker 1: contributor to the persistent wealth gap between black and white Americans.
Speaker 1: White families are far more likely than black families to
Speaker 1: own the home they live in. That, of course, is
Speaker 1: part of the long legacy of all kinds of racism
Speaker 1: and discrimination in employment, the real estate market, and in
Speaker 1: decisions by banks about who they'll lend money to.
Speaker 2: For a mortgage.
Speaker 1: You might remember a few years ago, some of the
Speaker 1: country's biggest banks, Wells Fargo, Bank of Americas and others,
Speaker 1: pledged to do something about that. They said they'd work
Speaker 1: hard to dramatically increase the number of mortgages they extend
Speaker 1: to black home buyers. So how'd that work out? Bloomberg
Speaker 1: Senior economics writer Sean Dunne set out to answer that question,
Speaker 1: and he's here with me now now with answers. Sean,
Speaker 1: good to talk to you again.
Speaker 2: Wonderful to be here, Sean.
Speaker 1: The last time we talked on this show, you were
Speaker 1: explaining the importance of home ownership to getting into the
Speaker 1: middle class and staying there. And now you're in Our
Speaker 1: colleague and Choy have written a big investigation that shows
Speaker 1: how difficult that can be and how sometimes that cards
Speaker 1: are stacked against people, especially Black Americans. Can you describe
Speaker 1: what she set out to find?
Speaker 2: What we set out to look at was some big
Speaker 2: promises that the three biggest banks in the mortgage market
Speaker 2: in America had made to increase black home ownership. And
Speaker 2: the biggest of those promises was one made by Wells
Speaker 2: Fargo in twenty seventeen, when it promised to lend sixty
Speaker 2: billion dollars over the next decade to create two hundred
Speaker 2: and fifty thousand new black homeowners in America. What we
Speaker 2: found when we looked at the data was that in
Speaker 2: every year since Wells Fargo had actually originated fewer mortgages
Speaker 2: to black home buyers than it did the year before,
Speaker 2: and that in twenty twenty one it actually underwrote forty
Speaker 2: percent fewer mortgages to black home buyers than it did
Speaker 2: in twenty seventeen, the year that it made that promise. Now,
Speaker 2: Wells Fargo isn't alone in making these big promises. JP
Speaker 2: Morgan promised in twenty twenty to create forty thousand new
Speaker 2: Black and Latina homeowners in America. Bank of America has
Speaker 2: made some similar big promises in terms of two separate
Speaker 2: fifteen billion dollar programs to help increase minority home ownership.
Speaker 2: They announced in August of this year that they were
Speaker 2: going to provide zero down mortgages in black minority communities
Speaker 2: in five cities in America as part of a test program,
Speaker 2: again to try and increase black home ownership. But those
Speaker 2: banks are all lending far less to black home buyers
Speaker 2: than they did a decade ago or then they did
Speaker 2: more importantly at the peak in two thousand and seven
Speaker 2: on the cusp of the subprime crisis. Today in America,
Speaker 2: those three banks originate fifty thousand or almost fifty thousand
Speaker 2: fewer mortgages each year to black home buyers than they
Speaker 2: did fifteen years ago. And we looked at something called
Speaker 2: the Home Mortgage Disclosure Act data, which is every mortgage
Speaker 2: in America gets recorded and reported by the government anonymously.
Speaker 2: And what we zeroed in on is the role of
Speaker 2: the big three banks, the biggest bank lenders in the
Speaker 2: mortgage market, and that's Wells Fargo, JP, Morgan, and Bank
Speaker 2: of America, and how that had changed in the last
Speaker 2: fifteen years.
Speaker 1: So despite the pledge to increase the number of black
Speaker 1: homeowners by issuing more mortgages to black family seeking to
Speaker 1: buy homes than numbers have actually gone down.
Speaker 3: Yeah, and to the point where in twenty twenty one,
Speaker 3: Wells Fargo originated just thirty seven hundred mortgages across the
Speaker 3: country to black home buyers.
Speaker 1: And had they stuck with the goal, then it would
Speaker 1: have been twenty five thousand.
Speaker 2: It would have been twenty five thousand. Yeah, and some
Speaker 2: of those would be mortges that they bought from other
Speaker 2: lenders and so on. There's other ways of doing it.
Speaker 2: But the point is the lending that their loan officers
Speaker 2: has been doing to black home buyers is actually down
Speaker 2: forty percent from the time they made this big pledge.
Speaker 2: And it's a pledge that wasn't a kind of one
Speaker 2: time thing. It's something that they have repeated in their
Speaker 2: social progress reports as recently a September of this year,
Speaker 2: and it was a big sixty billion dollar commitment that
Speaker 2: they were making and that they've continued to repeat. And
Speaker 2: what they don't tell you is that actually their business
Speaker 2: reality is that lending to black home buyers has gone
Speaker 2: in the opposite direction.
Speaker 1: So they're continuing to hey that this is something that
Speaker 1: they're doing, except the number is sort of show otherwise.
Speaker 1: So I guess the question is why why have the
Speaker 1: numbers gone down despite very prominent pledges to increase the numbers.
Speaker 2: Well, look, it's something that Wells Fargo, when we asked
Speaker 2: them this question, simply gave us a statement saying that
Speaker 2: they remained committed to increasing black home ownership in America
Speaker 2: and pointing to wider economic and social problems in America
Speaker 2: and laying the blame elsewhere, and JP Morgan and Bank
Speaker 2: of America both say they remained committed to their own goals,
Speaker 2: but that it just may take more time to meet them.
Speaker 1: Sean, your story focuses on one city block in Baltimore,
Speaker 1: which is emblematic of the things you're describing here.
Speaker 2: Absolutely, So we set out to look at where in
Speaker 2: America we could tell the story, and we settled on
Speaker 2: the twenty nine hundred block of Waalbroock Avenue in Westballaltimore.
Speaker 2: The twenty nine hundred block of Walbrock Avenue is really
Speaker 2: interesting in that it's a place that has a history
Speaker 2: of black home ownership. It's a block of rowhouses. It's
Speaker 2: part of a black working class neighborhood that has actually
Speaker 2: seen some serious disinvestment over the last fifteen or twenty years.
Speaker 2: Sprinkled among these homes that are still kept up well,
Speaker 2: that have tidy front lawns, that have longtime black homeowners
Speaker 2: living in them, are vacant lots. And one of the
Speaker 2: reasons for that is that, like a lot of neighborhoods
Speaker 2: in Baltimore, predominantly black neighborhoods in Baltimore, the twenty nine
Speaker 2: hundred block of Walburg Avenue just saw an exit of
Speaker 2: bank lending. Effectively, it became almost impossible in recent years
Speaker 2: to get a mortgage from a major bank to buy
Speaker 2: a property in a lot of neighborhoods in Baltimore. And
Speaker 2: you know, one of the people we talked to describes
Speaker 2: that as the cutting off of the capital artery to
Speaker 2: a lot of these communities. And that's something that has
Speaker 2: really been a legacy of the subprime crisis fifteen years ago.
Speaker 2: But it's there today, and it's there in the market,
Speaker 2: and it's been one of the things that is really
Speaker 2: dragged down, you know, back to that middle class dream
Speaker 2: of the wealth of the families that live on these blocks,
Speaker 2: the longtime homeowners there, Their homes are not worth what
Speaker 2: they were fifteen years ago in some cases, and that's
Speaker 2: largely as a result of the withdrawal of bank capital
Speaker 2: from a lot of these neighborhoods.
Speaker 1: You talk about this bank withdrawal, and on this block
Speaker 1: in Baltimore, you see numerous examples of houses where the
Speaker 1: bank's essentially left.
Speaker 2: Yeah, So we went through the property records for each
Speaker 2: of the properties on the block. On the south side
Speaker 2: of the block, there are twenty three properties, but there's
Speaker 2: only one Wells Fargo mortgage left on the south side
Speaker 2: of the block. Happened. Some of this is the result
Speaker 2: of people paying off their mortgages, people moving, people saying,
Speaker 2: but a lot of it is the result of foreclosures.
Speaker 2: And we started zeroing in on the story of one
Speaker 2: particular house, the house at twenty nine oh three Wahlberg Avenue,
Speaker 2: and that's where we met the Jones family. The story
Speaker 2: that we're told by Terrence Jones Junior, who was in
Speaker 2: high school at the time, is that he came home
Speaker 2: from high school one afternoon, found his mother waiting outside,
Speaker 2: and his mother had been battling illness for the few
Speaker 2: years beforehand, and his father had, as a result, been
Speaker 2: forced to cut back on his hours. They'd fallen behind
Speaker 2: on the mortgage. You know, it was a story that
Speaker 2: I think a lot of us can sympathize with. But
Speaker 2: as a result of falling behind, Wells Fargo foreclosed on
Speaker 2: the property and they lost their home. And the legacy
Speaker 2: is not just in this family being dislocated and losing
Speaker 2: their home, it's also in and how Terrence Jones Junior,
Speaker 2: now an adult who is now in his twenties thinks
Speaker 2: about home ownership, and I think that's something that's really
Speaker 2: interesting when you think about the future and closing that
Speaker 2: wealth cap and getting younger people on the housing ladder.
Speaker 1: And you spoke to him, Let's listen to what he
Speaker 1: had to say.
Speaker 4: You know, if a bank can be that heartless to
Speaker 4: families or heartless to a person, then you know, it
Speaker 4: just makes me don't even want to buy, don't even
Speaker 4: want to buy a house, or don't even want to
Speaker 4: you know long from the bank. I'd rather just buy
Speaker 4: my house out on his own, because I don't kind
Speaker 4: of want to go through the same thing that my
Speaker 4: father went through and that my family went through, losing
Speaker 4: the house.
Speaker 1: It was just like kind of like a traumatic experience.
Speaker 1: When we come back my conversation with Sean down In
Speaker 1: continues Seawan, we heard Termce Jones talking about his experience
Speaker 1: when his family's home was were closed on, and it
Speaker 1: wasn't an unusual thing to.
Speaker 2: Happen now, So the story of the Jones family house
Speaker 2: doesn't end with the family being kicked out. After the
Speaker 2: family was foreclosed on. The father had taken out a
Speaker 2: sixty five thousand dollars mortgage in two thousand and three
Speaker 2: and that was what he fell behind on. And ten
Speaker 2: years later they were kicked out of the house. A
Speaker 2: couple of years after they were kicked out of the house,
Speaker 2: Wells Fargo sold the house for five hundred dollars to
Speaker 2: an investor in Pennsylvania who turned around and sold it
Speaker 2: a few months later from nine thousand dollars to another
Speaker 2: investor who then rehabbed the house and sold it last year,
Speaker 2: late last year for almost ninety thousand dollars. And you
Speaker 2: think about that, You talked to Terrence Jones Junior, and
Speaker 2: what you see there is just the erosion of one
Speaker 2: family's wealth, the missed opportunities. That house is going to
Speaker 2: continue to appreciate as an asset in the years to come.
Speaker 2: And that is an appreciation and that's wealth that the
Speaker 2: Jones family is going to miss out.
Speaker 1: On Sean, you've said that the banks are saying market
Speaker 1: conditions and other forces beyond their control are largely responsible
Speaker 1: for their inability to meet the promise of lending to
Speaker 1: more black Americans. What did you find.
Speaker 2: When you talk about this with the banks, And the
Speaker 2: banks are incredibly sensitive about this issue. One of the
Speaker 2: things you run into very quickly is bankers blaming regulations
Speaker 2: and the regulatory environment and the crackdown that followed the
Speaker 2: subprime crisis Great Recession. And we know that a large
Speaker 2: part of the story of the collapse of the housing
Speaker 2: market at that time was the kind of reckless lending
Speaker 2: practices that happened beforehand by a lot of these same banks,
Speaker 2: and that they faced consequences afterward. Words for targeting minority neighborhoods.
Speaker 2: For you know, Baltimore was actually at the center of
Speaker 2: a series of lawsuits over reverse redlining, the actual targeting
Speaker 2: by Wells Fargo and other banks of black communities for
Speaker 2: high interest subprime loan and there was a huge settlement
Speaker 2: that was negotiated by the Department of Justice with Wells
Speaker 2: Fargo and twenty twelve, and there were other banks that
Speaker 2: faced fines as a result. So the cost of getting
Speaker 2: it wrong, the kind of regulatory cost, is one of
Speaker 2: the things that banks point to.
Speaker 1: And yet they made the pledge to increase lending once
Speaker 1: these regulations were in place, so it wasn't as though
Speaker 1: they changed the rules of the game afterwards. They went
Speaker 1: into it knowing that that's what the terms.
Speaker 2: Were, absolutely absolutely and you know, as part of this reporting.
Speaker 2: We talked to a guy called Brad Blackwell, who was
Speaker 2: a senior executive at Wells Fargo at the time they
Speaker 2: came up with this twenty seventeen goal, and he said,
Speaker 2: we saw a great opportunity in the black community in America,
Speaker 2: great business opportunity in terms of population growth. It was
Speaker 2: also the reality is mortgages in the white community, the
Speaker 2: home ownership rates something like seventy five percent is pretty saturated,
Speaker 2: but there's a growth opportunity in Latino and Black neighborhoods
Speaker 2: to get back into lending there. There's also a social
Speaker 2: responsibility that he talked about, and that has become This
Speaker 2: pledge from all of the banks has really become part
Speaker 2: of their social policy. The kind of ESG thing that
Speaker 2: we hear about.
Speaker 1: That's that environmental, social and governance as sort of being
Speaker 1: a better company by doing good.
Speaker 2: Yeah, it's corporate citizenship.
Speaker 1: So do you think that when they made these pledges
Speaker 1: at the time they saw an opportunity to make it happen,
Speaker 1: that they did it in good faith and then realized
Speaker 1: they'd made the wrong decision, or was this more of
Speaker 1: a social campaign from the start.
Speaker 2: Look, it's really hard to make that judgment, and I
Speaker 2: have to believe as a reporter that these were good
Speaker 2: faith pledges at the time. Banks certainly laid out strategies
Speaker 2: to get there. But you know, there's a structural problem
Speaker 2: in the way the business is done.
Speaker 1: What can be done? Because you said two things. One,
Speaker 1: the banks are not meeting their pledge to increase the
Speaker 1: number of mortgages going to black home owners. And the
Speaker 1: second thing is that the banks themselves are not wanting
Speaker 1: to issue as many mortgages anyway because it's not such
Speaker 1: a good business as it used to be. Those two
Speaker 1: things together don't look like a great future for mortgages
Speaker 1: for people who are looking to get in the middle class.
Speaker 2: Yeah, and for the broader issue of closing their racial
Speaker 2: wealthcap in America.
Speaker 1: So what's taking its space? Because people still want to
Speaker 1: buy homes. People are still buying homes, even now where
Speaker 1: interest rates are high. It's more difficult, but people want
Speaker 1: to buy home. So who's lending.
Speaker 2: So the biggest mortgage lenders in America today are non
Speaker 2: bank lenders. And these are outfits like Rocket Mortgage, which.
Speaker 1: Used to be Quickened and they're now the largest.
Speaker 2: They are now the largest mortgage lender in America, And
Speaker 2: just to give you an idea, they lent they originated
Speaker 2: more mortgages to black home buyers in twenty twenty one
Speaker 2: than all three of the biggest banks combined. And so
Speaker 2: they know how to do this.
Speaker 1: Now why though, that makes just ask you, like banks
Speaker 1: have been doing this for many, many years. Is obviously
Speaker 1: very profitable. Why is it that these other lenders are
Speaker 1: able to make a go of it in a way
Speaker 1: that would you know, seemingly be so profitable when the
Speaker 1: big banks can't.
Speaker 2: Do it well? I mean, part of it is convenience.
Speaker 2: You know, you can apply for a Rocket mortgage on
Speaker 2: your phone. There's that online lending side of things. But
Speaker 2: part of it is also intentional marketing to some of
Speaker 2: these communities that the Rocket Mortgages and others are doing
Speaker 2: that perhaps the banks aren't.
Speaker 1: So sean as usual. You've done a great job as
Speaker 1: spelling out a big problem. Where's the right spot here?
Speaker 1: If there is one, where is the solution? How does
Speaker 1: this get fixed?
Speaker 2: So there are some pretty obvious and fairly easy solutions
Speaker 2: to this, and one of the biggest ones that the
Speaker 2: people in the housing industry talk about is depositi assistance
Speaker 2: helping Black home buyers come up with the deposit, which
Speaker 2: is often the hardest thing for.
Speaker 1: A family, the down payment on the home.
Speaker 2: Exactly, the down payment on a mortgage, which can be
Speaker 2: anywhere from you know, three to twenty percent of the
Speaker 2: cost of a house, because a lot of these families
Speaker 2: are paying rent right and they can afford the monthly payment.
Speaker 1: Yeah, because rent is often more expensive than a mortgage,
Speaker 1: and yet you don't build anything exactly.
Speaker 2: It's just that entry point that they struggle with. And
Speaker 2: so there have been some efforts by the banks to
Speaker 2: get into this area, but they've been hidden miss But
Speaker 2: one of the big ones that Wells Fargo engaged in
Speaker 2: was created by a twenty twelve settlement with a Department
Speaker 2: of Justice in which they were asked to come up
Speaker 2: with fifty million dollars to do deposit assistance programs in
Speaker 2: eight cities, including Baltimore. One of the people we met,
Speaker 2: Nyamaka Odom, who is twenty nine years old, and she
Speaker 2: bought a house in twenty twenty in East Baltimore, and
Speaker 2: she was able to string together twenty nine thousand dollars
Speaker 2: in down payment assistance. The biggest chunk of that was
Speaker 2: fifteen thousand dollars and a forgivable loan from.
Speaker 1: Wells Fargo as part of this program.
Speaker 2: As part of this program, and it made all the difference,
Speaker 2: and she walked us through the process.
Speaker 5: I met with my realtor. He was like, you know,
Speaker 5: there are down payment assistance programs, you know, let me
Speaker 5: introduce you to a broker at bb and T at
Speaker 5: the time, now Turists And she told me, yes, you
Speaker 5: can get a lot of aid based on the income
Speaker 5: amount that you make because there's certain income caps for
Speaker 5: certain programs. And so she told me about the Community
Speaker 5: Block Development program at Baltimore that she told me about
Speaker 5: the Baltimore Neighborhood left and then the other was through
Speaker 5: Federal Home Loan Bank. And so I ended up getting
Speaker 5: all of them, which was nice because the Baltimore Neighborhood
Speaker 5: left one that was the last one I got, but
Speaker 5: it gave me fifteen thousand dollars. The other programs, the
Speaker 5: Baltimore Community Block Program, that one I did have to
Speaker 5: do counseling for. So I did online counseling talking about
Speaker 5: the responsibilities of being a homeowner, what can happen foreclosure
Speaker 5: and you know what to expect, and so I did
Speaker 5: that counseling virtually, and then I did in person counseling
Speaker 5: once I got certified for that, then they provided me
Speaker 5: the five thousand dollars of the down payment assistance.
Speaker 1: So there's what looks like a success story maybe a
Speaker 1: path for others. How many other people have access to that?
Speaker 1: Is that something that's scalable where let's say Wells Fargo
Speaker 1: really embraced this, would they be able to come closer
Speaker 1: to meeting this big public goal that they proposed.
Speaker 2: Absolutely, but it's something that comes and goes. So in Baltimore,
Speaker 2: over the last ten years, we were able to track
Speaker 2: down six hundred and eighty or so homeowners who received
Speaker 2: the assistance from Wells Farrio, and we went through and
Speaker 2: looked at where that money went, and what we found
Speaker 2: was that only sixty percent of it roughly went into
Speaker 2: majority black census tracks in Baltimore, and Baltimore is a
Speaker 2: majority black city. So it's the money. And you hear
Speaker 2: this a lot from folks who work in the fair
Speaker 2: housing world and advocacy groups, and that is that you
Speaker 2: really need to target that lending.
Speaker 1: Sean, when you look down the road, do you see
Speaker 1: this gap closing?
Speaker 2: I think they're really sad and frustrating. Reality is that
Speaker 2: we're going to go backwards for a few years. And
Speaker 2: that's the consequence of economic policy in the United States.
Speaker 2: It's a consequence of the Federal Reserve raising interest rates.
Speaker 2: Buying houses is more expensive. You know, a lot of
Speaker 2: people who could afford a mortgage a few years ago
Speaker 2: aren't going to be able to afford that. We are
Speaker 2: going to go through some turmoil. Just the number of
Speaker 2: people buying homes in the next few years is just
Speaker 2: going to be down substantially, and at the end of
Speaker 2: the day, closing that gap. It's a numbers game, it's
Speaker 2: a volume game. You need to lend more to black
Speaker 2: home buyers so that more black home buyers can buy
Speaker 2: homes and that they are buying homes at a faster
Speaker 2: rate than the white population. And that gets into all
Speaker 2: sorts of other things, like how credit scores are assembled,
Speaker 2: like discrimination in terms of appraisals and black community is
Speaker 2: the willingness of banks to lend into some communities in
Speaker 2: places like the twenty nine hundred block of Walbrough Cavenue.
Speaker 2: This is not something that is going to be solved tomorrow.
Speaker 2: I'm not sure it's something that's going to be solved
Speaker 2: ten years from now, but it's something that you need
Speaker 2: the big banks in America to live up to their
Speaker 2: promises to.
Speaker 1: Do Shine and thanks so much for coming on the show.
Speaker 2: Thank you so much for having me.
Speaker 1: When we come back, we'll hear from someone who's working
Speaker 1: with banks and other lenders to try to do something
Speaker 1: about this problem. What more can be done to press
Speaker 1: lenders to narrow the home ownership gap? Didrich Issantei Mohammad
Speaker 1: spends a lot of time working to make that happen.
Speaker 1: He's Chief of Membership Policy and Equity at the National
Speaker 1: Community Reinvestment Coalition here in Washington, and he joins me. Now,
Speaker 1: Didrichsantei Mohammad, thanks so much for being here.
Speaker 2: Yes, thank you for having me.
Speaker 1: First, let me ask you, what does the National Community
Speaker 1: Reinvestment Coalition do well.
Speaker 6: We are an organization that really started off as a
Speaker 6: coalition around the Community Reinvestment Act and trying to make
Speaker 6: sure that the Community Reinvestment Act, you know, recognize is
Speaker 6: that we don't need solely not discrimination, but we also
Speaker 6: needed to affirmatively further investment in housing by financial institutions
Speaker 6: and investment in general in order to help move the
Speaker 6: country toward a more equitable society. And so we pull
Speaker 6: together this coalition that today has grown. We have over
Speaker 6: seven hundred local organizations across the country that do different
Speaker 6: type of community economic development work. We work with banks
Speaker 6: and trying to help them point to them promising practices,
Speaker 6: best practices of investment into load to moditor income areas,
Speaker 6: and how to help address the racial wealth divide. And
Speaker 6: that can take kind of a host of different programs
Speaker 6: and types of advocacy.
Speaker 1: And that's exactly what we're talking about today, which is
Speaker 1: promises that a lot of the biggest banks lenders for
Speaker 1: mortgages made to increase the number of black homeowners by
Speaker 1: extending more loans than they have historically, and how some
Speaker 1: of those promises been broken. You authored a study that
Speaker 1: showed to boost black home ownership to sixty percent over
Speaker 1: twenty years in the US would require one hundred and
Speaker 1: sixty five thousand mortgages a year above what was being
Speaker 1: lent out in twenty nineteen.
Speaker 6: Yes, that is correct, and we like to you know,
Speaker 6: note that's about a fifty percent increase. You know that
Speaker 6: we would look at for most financial institutions, would need
Speaker 6: to do that in order to collectively get to this level.
Speaker 6: And you know, I think, well, the reason we wanted
Speaker 6: to put these types of numbers out there is want
Speaker 6: to highlight the kind of radical change necessary in order
Speaker 6: to get to what really is a humble goal, because
Speaker 6: the home ownership rate for white Americans is seventy three
Speaker 6: seventy four percent, So we're not even talking about getting
Speaker 6: to equality with white Americans. We're just kind of trying
Speaker 6: to help highlight that for the last sixty or more years,
Speaker 6: African Americans have seen very little changes in home ownership rates,
Speaker 6: staying right around forty three forty four percent, and that
Speaker 6: we need to finally get the country going in the
Speaker 6: right direction, and it would take a real substantive, long
Speaker 6: term increase in order to get to this, you know,
Speaker 6: clear strong majority of black home ownership level. We think
Speaker 6: it's necessary to address the racial wealth divide and racial
Speaker 6: economic inequality, and what are.
Speaker 1: The steps that need to be taken in order to
Speaker 1: meet that goal.
Speaker 6: You know, I don't think most banks, if any banks,
Speaker 6: are going to increase their mortgage lending to African Americans
Speaker 6: by fifty percent next year. But I think what banks
Speaker 6: can do is recognize that we have to commit ourselves
Speaker 6: to increasing mortgage lending to African Americans by let's say,
Speaker 6: five percent next year, and then try to do that
Speaker 6: five percent the year after that, and so we can
Speaker 6: start getting on the path of substantive change over time.
Speaker 6: I look not even at so much the whole kind
Speaker 6: of total numbers, because understand, the market goes up and down.
Speaker 6: How many loans are banks doing each year varies. Right
Speaker 6: now we have a higher interest rate, that might be
Speaker 6: less overall lending, but the percentage of black loans, you know,
Speaker 6: you can focus on increasing that, whether in a very
Speaker 6: strong market or a weaker market, and so, you know,
Speaker 6: I look for that type of a step by step progress.
Speaker 1: We saw the big lenders make these very big public
Speaker 1: pledges a few years ago to do exactly what you're
Speaker 1: talking about. What did you think when those pledges came
Speaker 1: out and how is it actually played out among the
Speaker 1: coalition that you're part of.
Speaker 6: Well, you know, for years I had been advocating and
Speaker 6: working with various organizations for financial institutions to recognize the
Speaker 6: reality of the racial wealth divide. Right NCRC has been
Speaker 6: working for years, and many oorganiations been working for years
Speaker 6: on increasing minority home ownership. So I was glad to
Speaker 6: see that financial institutions across the country were coming forward
Speaker 6: and say that we are making pledges to address the
Speaker 6: racial wealth divide, the racial wealth gap. That is good
Speaker 6: that they're on that page. They're recognizing that. I have
Speaker 6: some concerns that some of these pledges are overly broad,
Speaker 6: where you could say, you know, we're doing billions of
Speaker 6: dollars in order to bridge racial wealth to vibe, but
Speaker 6: not really clarifying well, how much of that let's say
Speaker 6: three billion dollars, how much of that lending were you
Speaker 6: already doing the previous years, Like how much of that
Speaker 6: is new lending additional lending? And also too, to be clear,
Speaker 6: this is lending. This isn't investment in giving of new
Speaker 6: dollars in right, it's them actually selling their products. They're saying,
Speaker 6: if they did two billion last year, they're going to
Speaker 6: do three billion next year. They're saying, well, and we
Speaker 6: hope to sell an additional billion dollars of products. Oftentimes
Speaker 6: it gets tied into this philanthropic giving. So I think
Speaker 6: it's really it's important we're going to make progress to
Speaker 6: be real specific about what is being offered, what is
Speaker 6: being promised and what they hope to achieve in the
Speaker 6: next five to ten years.
Speaker 1: I mean, that's a really important point you're making, is
Speaker 1: that you're not asking banks to give, you're asking banks
Speaker 1: just to sell their product.
Speaker 6: Yes, well, I mean I'm also asking banks.
Speaker 2: To give fair Enough.
Speaker 1: We've been talking about banks, there are also non bank
Speaker 1: lenders that have started to move in for loans that
Speaker 1: banks sometimes won't. How has that worked out?
Speaker 6: That's a growing important component that non banking companies are
Speaker 6: a larger and larger segment of those doing important mortgage
Speaker 6: lending and other types of lending. And you know, we
Speaker 6: are having more and more conversations with these other industries
Speaker 6: about you know, what is your commitment to ensuring that
Speaker 6: the mortgage lending space, a small business lending space, is
Speaker 6: something that serves all people, right, It's not something that
Speaker 6: we just think banks should do.
Speaker 1: Earlier in this episode, we heard from a young man
Speaker 1: named Terence Jones Junior in Baltimore whose family lost their
Speaker 1: home because his dad had to cut back on work
Speaker 1: to become his wife's caretaker, and he now lacks the
Speaker 1: desire to buy a home of his own, fearing that
Speaker 1: he could lose everything. What do you say to a
Speaker 1: young man like that who lost faith in the ability
Speaker 1: to buy a home.
Speaker 6: I think what I would say to someone like that.
Speaker 6: I mean, one is, first, it's important to recognize, you know,
Speaker 6: the challenge and the trauma of because it's a financial asset,
Speaker 6: but it's also something very personal, right, and it's something
Speaker 6: that you really do feel a loss, like if you
Speaker 6: lose a home and then you're going into rentorship, so
Speaker 6: you know, I think first important to recognize that loss,
Speaker 6: but also the economic benefits and even the kind of
Speaker 6: personal benefits of being able to own a home and
Speaker 6: be able to stay and not have to worry about
Speaker 6: rent changing every year or that they might not continue
Speaker 6: your lease. But you have something that you can stay
Speaker 6: in and you know, and your kids can come back to.
Speaker 6: It's still something that probably would be beneficial for you.
Speaker 6: And trying to figure out what is the best type
Speaker 6: of a mortgage program, what is the best economic situation
Speaker 6: you can set yourself up in so that this can
Speaker 6: be as safe and secure for you as possible. I
Speaker 6: don't think in overall the challenge is African Americans don't
Speaker 6: have a desire for home ownership.
Speaker 2: You know.
Speaker 6: I think we see repeatedly that when there are opportunities,
Speaker 6: African Americans are quick to jump in to the home
Speaker 6: ownership market. It's more about creating sustainable mortgage lending programs
Speaker 6: that can work considering the economic reality of African Americans.
Speaker 1: Diedrich Casantae Mohammad, thanks for speaking with me today.
Speaker 6: It's great talking with you. Thank you.
Speaker 1: You can see Didrisante Mohammad's report on black home ownership
Speaker 1: at NCRC dot org. And you can read Sean Dunnan
Speaker 1: and and Choice's story about banks and Black homeowners at
Speaker 1: Bloomberg dot com. Thanks for listening to us here at
Speaker 1: The Big Tech to daily podcast from Bloomberg and iHeartRadio.
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