She looks into the lasting effects of redlining in the Black community
The future of Black homeownership could be hinged on how Wells Fargo proceeds in the several discriminatory lawsuits it has on its hands.
That is the verdict of Kori Hale, chief executive officer of CultureBanx, who said in a Forbes article that the pursuit of homeownership has never wavered among Black adults between the ages of 26 and 39, with them raising the homeownership rate by more than 2% during the first three quarters of 2020 in spite of the many hurdles they have to face in the system.
However, the “gamesmanship” of Wells Fargo threatens this future as the lender still fares below industry averages even after they were called out for alleged discriminatory practices.
Read next: Wells Fargo's Black approval rate improves, but racial gap persists
In March 2020, Wells Fargo fell into hot water after Bloomberg found that the lender had rejected more than half of its Black applicants in the mortgage refinancing boom – the worst record among big lenders. In contrast, Wells Fargo approved 72% of White mortgage applicants in the same period.
Learn more about the risks of mortgage loan refinancing here.
Up until today, the lender doesn’t contest Bloomberg’s statistical findings, pointing to its more selective process and other factors such as credit scores.
“Until 1968, banks could deny mortgage loans based on a homebuyer’s race or neighborhood. Predominantly White communities could pass zoning restrictions designed to keep people of color out of neighborhoods,” Hale wrote. “It’s not just Black Americans experiencing the stiff hand by Wells Fargo’s mortgage application denials. Bloomberg looked through information available via the Home Mortgage Disclosure Act and found Wells Fargo was more sparing when it came to approving refinances overall by only approving 67% to Asian borrowers and 53% to Hispanic lenders.”
Read more: Wells Fargo wins early round in mortgage discrimination lawsuit
Hale explained that the Great Recession had already left the Black community at risk of having all their median wealth extinguished by 2053, but the redlining Wells Fargo continues to “get away with” will further exacerbate the problem, she said.
“Government housing policies such as redlining, have had lasting effects, from concentrating poverty, to stifling African American homeownership, and has contributed to the widening racial wealth gap,” Hale wrote. “Even Atlanta Federal Reserve president Raphael Bostic has called out things like the impact of long-outlawed policies including how redlining Blacks out of White neighborhoods continues to influence the ability of minority families to amass wealth. Simply put, redlining and other housing policies continue to undermine the accumulation of Black wealth.”
