LEW SICHELMAN
THE MORTGAGE SCENE
Trump Troop Doesn’t Believe Black Loans Matter Administration, agencies’ actions paint a picture of discriminatory neglect. BY LEW SICHELMAN | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL
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or the first time in its 10-year history, the political football known as the Consumer Financial Protection Bureau has filed a complaint in court alleging a violation of the Equal Credit Opportunity Act by a mortgage company. The supposed miscreant, Townstone Financial, a small Chicago-based nonbank retail lender, fired back, saying it did not violate the law’s prohibitions against redlining, which is the abhorrent practice of refusing to lend in poorrisk neighborhoods. But whether Townstone is guilty or not is not the point, at least not here. Rather, the point is that it took so long for the CFPB to locate a lender, any lender, that purportedly violated the ECOA, which was put in place 26 years ago to make it unlawful for any creditor “to discriminate against any applicant, with respect to any
aspect of a credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age; to the fact that all or part of the applicant’s income derives from a public assistance program, or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.” More than a quarter century later, discrimination still exists. Recently, LendingTree took a look at mortgage denial rates between Black Americans and the overall population in each of the nation’s 50 largest metropolitan areas. The findings were abysmal. Generally, Blacks were more likely to be denied financing for a house they want to buy than the overall population. For purchase money loans, their denial rate was higher in every one of the 50 metros and double overall. For refinance loans, the denial rate also was higher in each market, an average of more than 13 percentage points higher. And the racial disparities were sometimes even more extreme at the county level. Even in majority Black counties. “Racial barriers to homeownership ... are an undeniable reality for many,” said Tendayi Kapfidze, the site’s chief economist.
MINAMILIST EFFORT The Townstone case has been hailed in some quarters as proof the Trump Administration is serious about anti-discrimination and its support of people of color. But the CFPB suit is but small potatoes,
perhaps to mask all that this White House has done to unravel all the steps that took place before it to improve the lot of minorities. Of course, less than three years of the CFPB’s existence have been under Trump’s watch. Perhaps previous administrations haven’t been all that vigilant, either. But it seems to me as someone who is not a particularly political animal that there’s little else the current regime has done to promote antidiscrimination in the housing sector. In fact, it’s been just the opposite. Trump recently showed his true colors when he said, and I paraphrase here, that suburban homeowners no longer have to worry about people of color moving into their neighborhoods and bringing down housing values. The occasion of that repulsive remark was the recission of the Affirmatively Furthering Fair Housing rules, an Obama-era regulation requiring local governments to proactively ensure fair housing in order to receive federal housing funding. The reg was designed to give more teeth to the Fair Housing Act in combating segregation and was praised by civil rights groups at the time it was put into place in 2015. But in late July, the Department of Housing and Urban Development replaced it with a significantly watered-down policy that allows local governments to self-certify that housing is affordable and free of discrimination. The move was justified as
