Affluent Black County Mired In Mortgage Mess
 

What say you, GCers?

This is unfortunate but not surprising considering what is happening in other affluent (and nonaffluent) communities across the country.

It also highlights the different costs of living across the country. Paying $200K for a 646 sq ft house or condo is unheard of in some cities. It is considered CHEAP in other cities.

I watched House Hunters last night and said "daaaaaaag" at some of the costs of the houses and condos. I consider some of those houses substandard and not worth even half their cost---but it's based on cost of living. The house hunter on last night's episode ended up purchasing the only condo that was worth purchasing. Even it was way more expensive than it would be in other cities.

Discriminatory lending practices that disproportionately impact racial and ethnic minorities, including those of upper socioeconomic status, has been observed, discussed, and studied for over a generation. Therefore, it is no shock that racial and ethnic minorities, including the higher social class, are disproportionately represented in the housing crunch. That doesn't mean that the majority of instances in this context are a result of discriminatory practices.

With that said, I wonder what the larger outcome is going to be with this housing crunch.

I'm really not surprised, even though the DC area was less hit by the foreclosure mess than say, south Florida or the Inland Empire. Also, I WISH I could find a 650 SF apartment for $200K.

I have a lot more to say about this, which will have to wait--mainly about the pressure that affluent blacks receive from family and friends to buy a house right away after finishing college or graduate school, by any means necessary. For so many people, homeownership is the American Dream fulfilled and this yearning may be even stronger for blacks and Hispanics. The hysteria of the mid-aughts increased that since people were afraid of "being priced out."

I agree and I always shake my head at those of the upper socioeconomic because they should know better (I only say that because of the mentality of many upper socio, other times they are upper by salary and not upper by wealth so do we really consider them upper?). There definitely needs to be more education in lending.

Technically, no.

Socioeconomic status and social class rankings are based on qualitative economic distinctions of the source of the income rather than the amount of the income.

If someone has no wealth and their income is only based on salary--meaning, if they went jobless, they'd immediately be shit out of luck--their membership in the upper class club is fleeting.

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Also, if someone has a salary of $150K before taxes and debts of $140K, especially with no wealth accumulation, their debt-income ratio is comparable to someone with a salary of $40K. If the $40K salary is matched with a debt of $10K, the debt-income ratio can be better than the $150K person.

On that note, a lot of people with $150K salaries would not qualify for certain 30 year fixed rate mortgages based on their payment-to-income-ratio. They would have to get a different type of mortgage loan (like the dangerous ARMs) and some (more considerate) lenders would either advise them to get a cheaper house or wait until their debt has lessened.

I understand that there were a lot of people (not necessarily in this area, but in general) who were told things like "oh, you'll never qualify for this (good) loan, why don't you apply for this (not-so-good) loan?" Certainly, as you point out, people should be educated, but someone who is not a mortgage professional can't be expected to have the knowledge of a mortgage professional. Same with the realtors giving bad advice. Even people who had lawyers later found out that they couldn't trust them either.

I'm not absolving the buyers of blame, but certainly many, many people were complicit.

Oh I agree as well with exactly what you are saying which I why I don't place blame solely on the buyer. Wasn't trying to. I just know when the housing boom started a red flag came to my mind when I first started seeing people I know for a fact would not afford the home they lived in. I wasn't trying to be arrogant but it was simple math.

DeltaBetaBaby, I agree but people need to stop putting the onus on the mortgage lenders and realtors. These people are in big business and, unless you have some networks in the industry, this is straight business and not personal for them. They have only changed practices now because the Federal government is getting more involved.

People need to do some research. There is actually a lot of information out there that potential homebuyers can access. That includes community organizations (including some BGLOs) that do economic or homebuyer seminars. It is extremely confusing but take the time to read, compare, question, challenge, research, talk to different mortgage lenders, talk to anyone you know who has bought a house, see what your options are...cry and pray to the Heavens if need be. Just don't sit around waiting for everyone else to look out for you. These are college-educated people who are considered to be among the higher SES of Blacks in America. Surely people can't boast intelligence and kickassness when it comes to careers but then expect to be spoon fed elsewhere, especially given the nature of capitalism and discriminatory lending practices.

As it pertains to racial and ethnic minorities, this can be even more difficult because the average Black and Hispanic in this country is first generation(insert education, career, salary level). That makes it even more difficult to talk to family, friends, and access networks who have bought a home and/or who know what they are talking about. Even then, still talk to people and read/watch/research. After you get the info, you can more prepared to decide whether you think what you've learned is complete bullshit. :)

I don't think we are really disagreeing here, but I want to be very clear on the fact that banks did things that were flat-out illegal.

I'm all for personal responsibility, but I'm not okay with it being used as a smokescreen that allows such behavior by corporations to go on unchecked.

I saw this happening a LOT when I used to live in the Inland Empire. It was crazy. My parents bought their house brand new 12 years ago for 1/5 of the price houses in our neighborhood were selling for at the height of the bubble. The average middle-class family got approved for a mortgage that they thought they could afford, but in reality, would never be able to once the adjustable rates started to inflate. There were so many foreclosures in my town. Thankfully my neighborhood went through relatively few, but some of the newer, more affluent neighborhoods had as many as 1/4 of the neighborhood in foreclosure. Before the economic crisis, my area was considered to be one of the more wealthy areas in the IE, and it still is now, but just like the county in Maryland, it's going through a lot of struggles.

Typical.

Typical of what? Those dark folks you have issues with?

Why would I have issues with "dark folks"?

It's typical that DrPhil/DSTChaos to obsess over skin-color...and then go onto discuss some "skin-based reason" for something happening. It's typical to blame any other race for "failures", instead of taking responsibility.

Apparently "racial minorities" have been targeted by "predatory lending" (whatever that means, borrowing is a persons own decision, so I'm not sure how anything could be "predatory"), but I think the stats will bear out that in this crisis the counties underwater are mostly white or hispanic.

Umm...what?

Quote:

Originally Posted by DrPhil (Post 2062887) DeltaBetaBaby, I agree but people need to stop putting the onus on the mortgage lenders and realtors. ... People need to do some research. There is actually a lot of information out there that potential homebuyers can access.

^^^

LOL Exactly. I don't even know why he tries anymore.