Who's ripping off the minorities?
The Orlando Sentinel has an interesting story about how minorities pay more for loans than whites. The story even shows that upper income minorities are effected as much, or more that the poor. I have no doubt it is true. But in my experience, minorities don't average higher cost loans because of racism. They average them out of fear of racism.
I have no statistical data to support this. Just my on decade plus experience as a loan officer, and more importantly as an account executive with some of the largest lenders in the industry. As an AE, I used to call on other brokers, and my travels, I've run across many brokers who specialize in minority markets. Some were white, but concentrated on the Hispanic market. Some where Hispanic, Black, Asian, and concentrated on there own race for their market. What well over half had in common was a good name in their market, and the greed to take advantage of it. They leverage fear of racism to charge higher rates/fees.
I believe the way it works is that a minority borrower may see a lender of the same race as the last person to discriminate against them. Other people in the community may also endorse this lender. Like all borrowers, they are more concerned about being approved then paying 7.25%, instead of 7.125%. Lender's know this, and are not as aggressive about quoting the lowest possible rate when other factors (like fear) are involved. Does this make the lender a racist? Nope. It makes him a greedy bastard. But fear of racism is what feeds his greed. All the while, they brag about the people they are "helping". As a loan officer, I have found that treating borrowers as individuals, instead of parts of a group, that I can deliver lower rates then those who target minorities. I just wish more minorities would shop around a little, they'd be surprised at how fast they could level the playing field.
My advice, as always, is to shop around. Don't let race play a factor in your decision of which lender to use. There are plenty of great lenders of all races ready to do a good job for you.
I have no statistical data to support this. Just my on decade plus experience as a loan officer, and more importantly as an account executive with some of the largest lenders in the industry. As an AE, I used to call on other brokers, and my travels, I've run across many brokers who specialize in minority markets. Some were white, but concentrated on the Hispanic market. Some where Hispanic, Black, Asian, and concentrated on there own race for their market. What well over half had in common was a good name in their market, and the greed to take advantage of it. They leverage fear of racism to charge higher rates/fees.
I believe the way it works is that a minority borrower may see a lender of the same race as the last person to discriminate against them. Other people in the community may also endorse this lender. Like all borrowers, they are more concerned about being approved then paying 7.25%, instead of 7.125%. Lender's know this, and are not as aggressive about quoting the lowest possible rate when other factors (like fear) are involved. Does this make the lender a racist? Nope. It makes him a greedy bastard. But fear of racism is what feeds his greed. All the while, they brag about the people they are "helping". As a loan officer, I have found that treating borrowers as individuals, instead of parts of a group, that I can deliver lower rates then those who target minorities. I just wish more minorities would shop around a little, they'd be surprised at how fast they could level the playing field.
My advice, as always, is to shop around. Don't let race play a factor in your decision of which lender to use. There are plenty of great lenders of all races ready to do a good job for you.
1 Comments:
Boy do I agree with this, have written similar experiences.
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