SD must remove barriers to create equitable housing

SAN DIEGO (KGTV) – A report on loans in San Diego County indicates that financial discrimination based on race is rampant in most communities in San Diego.

The report from the San Diego branch of the NAACP says they found lending models for mortgages and small business loans compatible with racial discrimination.

According to the local NAACP, they reviewed publicly available federal loan disclosures issued under the Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA).

“We have things called fair loans and fair housing and all that, but is it really fair,” said NAACP San Diego branch housing committee chair Derrick Luckett. “That’s the question, and it’s not.”

The NAACP said it analyzed HMDA mortgage applications for San Diego County for 2018 and 2019.

According to the report, “We reviewed applications for single-family homes and first privileges, which include over 174,000 applications that were either approved or rejected (withdrawn or incomplete applications are not considered). San Diego, the racial gap in mortgage approval approval rates appear at statistically significant levels for all race / ethnicity categories compared to whites except Asians who enjoy mortgage rates. approval similar to whites (Figure 1).%. “

These figures are similar to the findings of a regional report that examined barriers to equitable housing choice.

According to the 2020 report, which the city of San Diego led, across San Diego County, white applicants were significantly over-represented in the loan applicant pool, while Hispanics were severely under-represented.

Looking at race by income level, the report found that “White applicants at all income levels generally had the highest approval rates.” Likewise, high approval rates were recorded for Asian applicants, although there was some variation by jurisdiction. Hispanic applicants, however, were well below the approval ratings of white and Asian applicants in the same income groups in 2012. Those gaps had narrowed somewhat by 2017, but were still present. racial / ethnic groups in the same income groups.

The report noted that while the analysis provides an in-depth look at the lending models, it does not conclusively explain any of the discrepancies. He says, “Besides income, there are many other factors that can contribute to the availability of financing, including credit history, the availability and amount of a down payment, and knowledge of the home buying process. HMDA data does not provide insight into these other factors. “

Redlining

Several intersecting and overlapping factors have impacted patterns of segregation and integration throughout the city’s history, according to a report from the city of San Diego.

The report states: “These factors include theft from whites; housing costs; access to well-paid jobs and economic mobility; racial and economically restrictive clauses in real estate deeds; redlining; discriminatory real estate practices; zoning; the construction of highways; voting initiatives; and public resistance to increased housing and density.

In the 1930s, the Home Owners’ Loan Corporation (HOLC) was formed to purchase pre-existing foreclosure mortgages and refinance them into new government mortgages.

According to an appendix to the city report, “HOLC would not buy or offer mortgages in areas it deemed economically dangerous. “C” or “D”. Neighborhoods rated “D”, shown in red on maps, were not eligible for federal mortgages, an action known as the “red line.” Red light districts were often the oldest neighborhoods in the city occupied by low-income residents and people of color. This was also true for San Diego, where most of the red light districts were in the southeast and southern areas of the city where high concentrations of African American, Asian and Hispanic residents lived there. “

The report states that in 1934, Congress passed the National Housing Act and created the Federal Housing Administration (FHA) to administer a program providing federal mortgage insurance to private lenders in an effort to stimulate private lending.

“The FHA used the same principles of redlining to deny mortgage insurance. Soon, private banks, lending institutions and the Veterans Administration (VA) would follow suit. When the FHA expanded to construction loans for home builders, the discrimination has become even more explicit because the FHA has banned builders from selling homes to African Americans, ”the report said.

Work to educate

“I hear the stories of my mom and dad, you know what they had to go through growing up,” said Sheri Jones, owner of SAKK Realty.

As a successful real estate agent and community leader, Jones has heard people’s fears. She is now working on education and empowerment.

“Let people know that I have one or more lenders that they can lend to you, and here’s how it’s going to work,” she said. “If you can’t get approved, we’re going to teach you what you need to do to fine tune it, so you need to be approved.”

She said there are other changes that can help people feel more comfortable with the process.

“There aren’t a lot of minority real estate agents in the business and not a lot of minority lenders in the business. I think even down to the home inspector, you know, the escrow companies. It really needs to be diverse because now we have people who are like buyers, they feel more comfortable buying, ”Jones said.

Jones also suggested more improvements in down payment programs.

The Fair Housing Act prohibits discrimination based on race or color, religion, sex, marital status, national origin and disability.

There is a governing body in San Diego County that is looking for residents.

The San Diego City-County Reinvestment Task Force (RTF) is a public-private organization established by the City and County of San Diego to assess the lending practices of local banks and develop reinvestment strategies in low-income communities and moderate.

The group monitors the percentage of deposits that large local banks reinvest in the community through small business loans, affordable housing development and mortgages to residents of low-income neighborhoods.

San Diego City Council member Monica Montgomery Steppe is co-chair of the board.

In a statement to ABC 10News, she wrote, “My office has focused on a holistic approach to addressing the disparate impacts that decades of intentional divestment have had on our black residents and underfunded communities,” said Monica Montgomery Steppe, Board Member. Chairman of the City-County reinvestment working group. “We are working to provide housing stability for these residents with a new San Diego Black Home Buyers Program that assists with down payment assistance, and the new Wells Fargo BIPOC Wealth Opportunities Restored through Homeownership initiative ( WORTH). The WORTH initiative supports the increase in BIPOC home ownership by creating 5,000 new owners in eight markets by 2025, for a total of 40,000 new BIPOC owners, ”added Montgomery Steppe.

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