Minority Mortgages, Part 2

Minority Mortgages, Part 2 (1992)

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Themes: Urban Challenges |

Guests: Don Bailey, Bernard Parker, Karla Brintley, Lorraine Van Etten, Saleem Khalid
Host : Cliff Russell
Producer : Tony Mottley


Summary: This is the second of two programs from 1992 examining the relationship between African Americans, banks and the granting of mortgage loans in the inner city. The program begins with host Cliff Russell posing the question: Do banks discriminate against the inner city in general and blacks in particular?


Russell presents a videotape clip from the previous week's panel discussion then introduces this week's panel (three of whom appeared the previous week): Saleem Khalid, executive director of the Detroit Alliance for Fair Banking; Lorraine Van Etten, vice president of community lending for Standard Federal Bank; Karla Brintley, chair of the banking committee of the community group ACORN; Wayne County Commissioner Bernard Parker; and, participating by telephone, Don Bailey, vice president for NBD Community Development Corp., a mortgage lender.


Parker says he thinks that local banks are just beginning to open up their perspectives to become more receptive to mortgage applicants from the inner city. "I think there is a history here where the financial institutions, particularly the banks, rather than the savings and loans, had not been interested in even making loans and mortgages," he says. "They didn't think there was enough profit in it. They did not have faith in the citizens in Detroit."


He says the banks have been slow to recognize that the fact that many inner city residents don't meet their strict lending criteria (e.g., the percentage of their income banks think they should be spending on housing) doesn't mean they are not reliable repayers of debt. And Khalid says many potential borrowers don't even apply because they expect to be rejected.


Van Etten says Standard Federal has been working to change those perceptions by offering workshops for potential borrowers and by granting carefully monitored loans to some who would otherwise have been rejected.


Parker says some of the problem arises from different definitions of what constitutes good credit. Banks, he says, might turn down an applicant who has frequently paid bills late, focusing on the lateness of payments, whereas the applicant sees himself or herself as having good credit because the bills were always paid eventually and nothing was ever repossessed.

"So we go in there thinking I've had a job for 15 years, I've paid all my bills, no one has taken anything away from me and then you get turned down for a loan," Parker says. "It makes you feel like you're inadequate." And one person's rejection can dissuade others - friends and relatives - from even applying.


Panel members also discuss the recent development of the Victoria Park subdivision of single-family homes on Detroit's lower east side - the first such development in the city in decades. While they agree that it is a positive sign for the city, they also agree that it does not address the needs of low and moderate-income residents who cannot afford the new houses.


Taken together with the previous week's discussion, this program offers an important examination of the issue of mortgage lending in the inner city - a longstanding concern for many urban residents in Detroit and other cities around the country.