Only Blacks Need Apply… In the Spirit of Equity
Fannie makes its subsidies for blacks explicit, but they don’t appear to extend to other racial groups such as Hispanics and Asians. Low-income white borrowers are also excluded.
Last week, Fannie Mae & Freddie Mac announced actions that aim to make it easier to buy a home and close the racial homeownership gap. Their Equitable Housing Finance Plan for 2022-2024 outlines a range of pilot programs that remove barriers blacks face when buying or renting, and keeping homeowners and renters at home:
- Valuation Modernization aims to support an equitable appraisal process for Black households and communities of color
- Expand Appraiser Diversity Initiative (ADI) to attract new entrants to the residential appraisal field, overcome barriers to entry (such as education, training, and experience requirements), and foster diversity, which we believe will help to reduce appraisal bias against Black homebuyers, homeowners, and communities over the long term.
- The reduction of borrower closing costs for Black homebuyers via appraisal products, appraisal reimbursements, and/or title products
- Reduce Closing Costs for Black consumers to help support the removal of the barrier of lack of sufficient funds for closing (down payment plus closing costs)
- Increase access to credit for the 15% of Black consumers who lack credit scores by (a) implementing automated underwriting enhancements and (b) expanding positive rental data in Desktop Underwriter ® (DU®) adoption
- Support the expansion of homeownership eligibility and availability of down payment assistance, while exploring ways to reduce Special Purpose Credit Programs (SPCP) participation hurdles for lenders.
- Test add-on features to one or more SPCP pilots aimed at strengthening ongoing borrower stability by helping borrowers deal with unexpected expenses and repairs, or temporary disruptions to income…
“The plans released last week might have been written by California Rep. Maxine Waters“, writes WSJ editorial board.
One program would assist black borrowers with down payments. Most home-buyers are required to put down at least 20% of the cost of a new home to reduce the risks of default. Fannie’s plan would effectively require taxpayers to subsidize down payments for black borrowers. Revenue that Fannie earns on its mortgage portfolio is retained as capital to protect taxpayers during a downturn. Under Fannie’s plan, some of that revenue would go to reducing down payments.
Another new program would reduce “loan level price adjustments” for black home buyers. Lenders typically charge higher rates for borrowers with lower credit scores, and Fannie says reducing them can “reduce obstacles for prospective Black homeowners.”
Still another program would “support the reduction of borrower closing costs for Black homebuyers” — for instance, via appraisal reimbursements. Taxpayers would help finance this “support.” Fannie also wants to help black homeowners avoid foreclosure by helping them “deal with unexpected expenses and repairs, or temporary disruptions to income.” This suggests that Fannie may now push into funding home repairs and welfare…
Fannie makes its subsidies for blacks explicit, but they don’t appear to extend to other racial groups such as Hispanics and Asians. Low-income white borrowers are also excluded.
Haven’t we seen this movie before? Who remembers the movie “The Big Short”?
They should not be making exceptions to fund bad loans in the spirit of ‘equity.’ In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. The Clinton/Cuomo era HUD policies led directly to the housing meltdown of 2008, and this too will be a disaster.
Shades of the 2008 mortgage lending fiasco. How easily we forget past mistakes!
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A carbon copy of Bill Clinton’s policies at the housing giants with disastrous results!
Actually Junior Bush was President when the crap hit the fan having won the 2000 election. He won two terms. I’m not in any political party and dislike Clinton for other reasons. But he wasn’t the cause of the great recession.
Here is what Robert Reich, the Secretary of Labor in the Clinton administration, wrote on this matter:
“Finally, in 1999, President Bill Clinton struck a deal with Republican Senator Phil Gramm to do exactly what Wall Street wanted, and repeal Glass-Steagall altogether.
What happened next? An almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and sold them to their customers in the form of securities. Once again, there was a huge conflict of interest that finally resulted in a banking crisis.
This time the banks were bailed out, but millions of Americans lost their savings, their jobs, even their homes.
A personal note. I worked for Bill Clinton as Secretary of Labor and I believe most of his economic policies were sound. But during those years I was in fairly continuous battle with some other of his advisers who seemed determined to do Wall Street’s bidding.
On Glass-Steagall, they clearly won.
To this day some Wall Street apologists argue Glass-Steagall wouldn’t have prevented the 2008 crisis because the real culprits were nonbanks like Lehman Brothers and Bear Stearns.
Baloney. These nonbanks got their funding from the big banks in the form of lines of credit, mortgages, and repurchase agreements. If the big banks hadn’t provided them the money, the nonbanks wouldn’t have got into trouble.
And why were the banks able to give them easy credit on bad collateral? Because Glass-Steagall was gone.
Other apologists for the Street blame the crisis on unscrupulous mortgage brokers.
Surely mortgage brokers do share some of the responsibility. But here again, the big banks were accessories and enablers.
The mortgage brokers couldn’t have funded the mortgage loans if the banks hadn’t bought them. And the big banks couldn’t have bought them if Glass-Steagall were still in place.
I’ve also heard bank executives claim there’s no reason to resurrect Glass-Steagall because none of the big banks actually failed.
This is like arguing lifeguards are no longer necessary at beaches where no one has drowned. It ignores the fact that the big banks were bailed out. If the government hadn’t thrown them lifelines, many would have gone under.
Remember? Their balance sheets were full of junky paper, non-performing loans, and worthless derivatives. They were bailed out because they were too big to fail. And the reason for resurrecting Glass-Steagall is we don’t want to go through that ever again.
As George Santayana famously quipped, those who cannot remember the past are condemned to repeat it. In the roaring 2000’s, just as in the Roaring Twenties, America’s big banks used insured deposits to underwrite their gambling in private securities, and then dump the securities on their customers.
It ended badly.
This is precisely what the Glass-Steagall Act was designed to prevent – and did prevent for more than six decades.”
Next, the Clinton administration’s rules ordered the taxpayer-backed Fannie and Freddie to expand their quotas of risky loans from 30 percent of portfolio to 50 percent as part of a big push to expand home ownership.
In 1994, Bill Clinton had the brilliant idea that banks should be forced to loan money to people who can’t pay it back. He then compounded this error by removing oversight of the banking industry.
Gas + Match = Boom.
The Community Reinvestment Act forced banks to give loans to people based primarily upon their minority status, not based on their ability to pay back the loan. Banks suddenly found themselves with a massive amount of toxic “subprime” loans. So… being managed by reasonably intelligent people, the banks acted to get rid of these toxic loans.
Because Clinton had also removed oversight, the banks had a free hand to misrepresent and sell these toxic loans. Clinton’s actions literally created a “Wild West/Anything Goes” environment.
The whole scam worked as long as housing values kept increasing.
But when the FED increased loan rates, people with adjustable rate mortgages could no longer afford their house payments. The foreclosures started and the dominoes began to fall.
You are spot on!!
Ah yes, the empty bag.
Government sponsored luxury.
Although subprimes are nowhere near the levels now they were then, unfunded derivatives are exponentially higher. Sold and bought and sold and bought again. We’re going to need a bigger bag. The entire thing made possible by the federal reserve because with this private group controlling monetary supply, quantitative expansion and all the pet programs that run with it would not be possible. Imagine having to ring up the gold miners and tell them to get back in that hole and extract several more tons immediately, congress passed down another 50 billion dollar subsidy, and another one is lined up for next week, and the week after, and the week after, and again, again, again, again.
Sorry, meant to say; without this private group, none of it would be possible.
It’s all going down again, this is the calm period as they attempt a soft landing and gently deflate. Of course we know none of it is working. QE is no longer contained in the housing market, inflation proves it. CPI is way off, they’re talking much higher aggregate and we can see with our own eyes that pound of hamburger doubled in cost, so did the gallon of gas and loaf of bread.
Everyone in the halls of government whom has acquiesced to never balancing the budget, operating with no intention to pay down the national debt, derelict in their duty and criminal in their acceptance of ongoing pork spending. Of course the politicians don’t run anything, and those whom pull their strings are not going to turn off their own privately controlled corporate welfare monetary supply. They make sure to have a member on every board of every major media medical and all these other industries full time. ‘It’s a private club, and you and I are not in it. They’re coming for your money to give to their rich friends on wall street. And you know what, they’re going to get it, they’ll get it all.’
Every single new subsidy program, along existing subsidy programs merely puts more money into the ultra wealthiest pockets and leaves less real wealth for regular Americans. People whom accept the subsidies are their own worst enemies because by fueling and supporting ongoing demand for handouts, they continue to sell out their own and everyone elses posterity down the line to generations after. This is why among communities that accept more welfare, there is consistently declining actual wealth. These statistical measurements may be accurate, but their framing as a problem which more government intervention is the solution is absolutely the most counter productive approach possible. Every single dollar accepted throughout the entire spectrum of welfare from corporate to citizens in need merely tacks up the debt, fuels inflation, and cuts an already diminished monetary worth into smaller pieces. Taxation is theft as it’s literally impossible to generate new money and new wealth through the process of taxation and then subsequent welfare redistribution. Poisonous protectionism. We are from the government and are here to help.
I’ll see your term limits and raise you fines based on income.
The Fourteenth Amendment to the U.S. Constitution states: “No State shall … deny to any person within its jurisdiction the equal protection of the laws.”
Race-based subsidies for home ownership violate the Equal Protection Clause by discriminating against some potential home owners simply because of their race. How are such subsidies not a form of racial discrimination?
its discrimination…..against anyone who is not black….funny how we’ve been down this road before and never seem to learn the lessons…discrimination is alive and well in the united states, just change the skin color…
“Expand Appraiser Diversity Initiative (ADI) to attract new entrants to the residential appraisal field, overcome barriers to entry (such as education, training, and experience requirements),” …. Education, Training and Experience is a barrier? Just think if they did that to become a doctor? I’d be embarrassed if my race needed so many special crutches for everyday life.
Barriers to Entry? How about appraisers who don’t train outside of their family or race?
Take a poll. How many appraisers have you trained that don’t look like you? The qualifications can’t be circumvented here. The training and experience are the barriers.
What? Everyone who isn’t white should be embarrassed of their race? THIS black appraiser has received NO special consideration to become an appraiser NOR do I in ‘everyday life’.
Be careful. They don’t like people speaking up against racism and bigotry here. They censored me cause I said “ignorant”.
HK, instead of coming here and insulting everyone why don’t you explain to us why Maxine Waters financial program isn’t racist. Then when you’re done please give me example of the financial program that is racist
Is it my job to educate you? Nope. You have access to the same amount of information as I do. That’s your burden to carry.
HK.. Please do educate us. But I don’t think you have the intellect to answer the question. So you just go on with your one liners and think you are adding to the conversation.
This reverse discrimination will “CREATE” discrimination where it didn’t exist. Since this field is predominately white; who’s going to mentor/train this “Black Privileged Class”?
No one has to mentor or train. They are going to remove experience requirements…….and education and training. What can go wrong?
LOL….absolutely nothing will go wrong.
Great policy. If everything is racist, then nothing is racist.
Thanks Carter and Clinton for the Community Reinvestment Act which was the blueprint for this garbage.
How will they know which appraiser to send out for each assignment?
Maybe there will be an appraiser photo ID on record?
***This comment was edited by AppraisersBlogs Team. Profanity is edited out because it’s inappropriate within the context of this blog.***
Can’t wait for all the *** to age out of this profession.
Please expand on your comment
Why berate me for being old? I had a wonderful 40 year career in the loan officer, realtor & appraiser field.
I hate to watch this go down to where it’s headed. Recently retired !!!
The absurdity of what is going on in the mortgage industry defies any sensibility. I am not aware of any “good ol’ boys” club out here, yet the Government insists on shoving that belief down everyone’s pie hole. I suppose if you say it long enough it takes on a life of its own. The problem is we have these young people coming into Government that have no life experience and they are going to tell everyone what’s wrong with all of us. Sickening. I understand what they are trying to accomplish but there are better ways than blaming the mortgage industry individuals. If they are proceeding in this direction, then all individuals should qualify for the proposed programs, or I am afraid it is obvious discrimination by our own Government.
My daughter was taught during her training as a teacher in Chicago not to expect as much out of the black students, due to effects of slavery. It seems this soft racism of low expectations is spreading to all professions and facets of our crumbling society. It’s truly sad, and it is doing nothing but hurting all races.
I have had a complaint filed on me over 25 years ago claiming that I and my firm was racist. I was subpoenaed to appear at the Federal Building in downtown Richmond for hearing/mediation session.
I walked into the room where there were an elderly black couple, a white federal hearing officer, a black lawyer, as well as a black transcriptionist.
The hearing officer was totally surprised to see I had no lawyer and asked why I didn’t have counsel with me.
The complaint was presented by their attorney with no questions from the hearing officer.
Then they turned to me.
I presented that these people did not know me, my background, my family, my education level, or anything else about me. Oh, by the way the house they were purchasing was vacant.
I then went on to say that my mother was the superintendent of the City of Welfare office. As such, there were NUMEROUS times she had to place children into Foster homes. Prior to that she would bring them to our house, bath them, and clothe them in my things.
I was 3, 4, 5 years old. My mom treated each with love and kindness. It mattered not if they were white, green, black, yellow, or green.
The point is that the majority is guilty until proven innocent in many racism actions.
Needless to say, my case was dropped in less than 10 days.
These specialty programs for only blacks appears to be REVERSE Discrimination?
Oh, by the way my firm was made up of 4 women and 5 men at the time.
These post sound racists. Instead of whining, add suggestions and write to your congress person to get your voice heard. No one wants special treatment, but when the treatment you receive is different from the normal treatment
others receive that is the problem. And if nothing has changed since Clinton, what does that say. You all know it is hard to find someone to help get the required experience for your hours.
I tried to become an appraiser years ago and could not find anyone to work with. Wasted my money on classes. This time I found someone before paying for the coursework.
Most of the more experienced appraisers did not need a college degree to become an appraiser or a lot of these classes. We have to do more to help those wanting to get in the field no matter what their race is.
We all have to be better and act a united group with the same goals for our industry!
Correct! My mentor never took a class nor test to become an appraiser.She just trained under an appraiser. The folks just ‘hung a shingle’ that said they were an appraiser.
There was no licensing to be an appraiser, just get the TRAINING and EXPERIENCE.That’s how the barrier to enter the appraisal profession got erected.
The most experienced/older appraisers here know about this. It all started with Neil Bush(then President Bush’s son) and the Silverado Savings and Loan financial debacle. 1988 in Denver Colorado. (That building is about 2 miles from my house.)
They decided to blame everything on inflated appraisals. Anyhow, that’s how we in Colorado came to be licensed appraisers. Everybody who said they were appraisers, were GIVEN licenses based on how long they worked in the field. I said GIVEN!
PJTMC – that was the problem. Red lining which was instituted by the government and financial institutions which was ran and mostly controlled by the “Good Ole Boys Network”
There is a program in my city that will build an ADU on your property and finance it for $100k. It’s not available in the black or white neighborhoods….. This mess goes on all the time.
Dan – I have observed blacks have to work twice as hard to prove themselves in this day and age. For them say don’t expect much from black students in ridiculous.
Seneca – what were the requirements for you to become a Certified Appraiser? Just wondering.
RT – they have been making policies that violate the 14th amendment since it was written by men who owned slaves.
There shouldn’t be any reason for this type of policy in this day and age. But sadly there is a need. Maybe not this but something needs to happen. If you have a better suggestions please tell us.
Robin in Denver – I have just trained one candidate waiting to take her Certified Test. I will train anyone who wants a chance.
Also Robin in Denver, my mentor was not required to take any of the classes, nor was required to have a college degree (although she has one) in order to be certified. FYI
Chris G, More than they do today. Over a half dozen of classes, two years experience, log 2500 hours and the test. That was just to get the license. That was in the early 90’s. To get certified I had to take 5-6 more classes. I already had a four year degree. What’s your point?
Chris G, once again, I see you don’t know what you’re talking about. If you think the standards to graduate high school are as tough now as they were 30 years ago then I have a bridge to sell you. And yes, the standards are now different for different races. MLK would be rolling over in his grave if he could see what the left has done to divide the races.
Chris; so do you go out of a market area to value homes higher than the immediate area? Even if it means staying inside the “red line district” just so you’re not part of the “Good Ole Boys Network”?
The reference to “good ol’ boys out here” meaning the appraisal industry. The fact the government is the problem is a given and I couldn’t agree with you more.
Let’s make it super easy for blacks to own a home. Pay them back for cost of appraisal. Give them loans to help with home repairs to keep them in the home. And this all comes off the backs of ALL taxpayers. Sorry but as a tax payer I do not agree to fund money to just one race. Also not every black person should own a home. Just like all Whites or other races should not own homes. Foreclosures will loom large here. No race should get these kinds of priorities over others and if that isn’t discrimination I don’t know what is. Clinton wanted to get everyone in a home. Again not everyone should be a homeowner. Also making it easier for blacks to enter the profession is an insult to their race. Dumb down the profession for black and minorities. But what is worse is they think having more blacks will fix the appraisal valuation issue. Really? That is also a racist comment. Our race should make zero difference in the outcome of the appraisal. If 90% of the Appraisers were black would they be racist against white homeowners. We are going so far off the rails with this fear of bias and racism that the powers that be are going 180 in the other direction with no hope for making things better. All other races should file a class action suit against Fannie and Freddie.
Well said, Mary. You’re exactly right. If the goal had been a color-blind society, as MLK hoped for, we would have been so much better off. Instead, the left has been trying to divide us by race, class, age, gender, sexual preference, etc. And we are paying the price, to the point where now, if you say you want a color-blind society, you’re a racist! Our appraisal profession is just one of many which is suffering for it.
In the early 60’s we had a program that could put almost anyone in a house, Section 8 sales and Farm Home Administration, offered as low as 1% subsidized loans, the idea was that home ownership would have people vested in their community. Nixon ended the program. Its hard to believe that no one has tried that again. I find today that there are many people who would do better with a little hand up. They will work harder. As to appraisers, I began before licensing, I have also had a Real Estate Sales license, and cannot for the life of me figure out why appraisers do not have fair housing required classes. Real Estate Sales people must take Fair Housing every two years. I sent the suggestion to the foundation education department, and was told the Realtor Fair Housing Course is only 1.5 hours, and the foundation does not except classes less than 2 hours. So, why wouldn’t they figure a way to offer a 2 hour course? If you have not had the course can you be expected to know what fair housing is? . ….and that is my $0.02.
Did someone mention barriers to available housing? Curious, I wonder who needs a house to live in, and where they come from. Lets start with open door migration policies and the 2 million fewer housing units available to any given American populace segment in the past year and a few months alone. Then we’ll double that number and dig into the ibuyer fiasco where they moved millions of available housing units permanently into the hands of commercial rental interests and wrote off the tax bill.
Judicial Watch just beat a mirror type racial discrimination program in higher education funding in an official court room setting. They are standing by to assist others, and all you need to get their attention is some letter writing, a member donation, to simply subscribe and get on board. Then you access their civil rights lawyers whom are specifically equipped and educated for this exact type of issue. You’ll get the nifty monthly judicial watch paper magazine mailer (The Verdict). I like to leave that one in waiting rooms and enjoy that real traditional American news focusing on truth and justice. Read on the prescient for these color coded discriminatory programs in the below link. If you’re an appraiser, you should subscribe and call on Tom Fitton and his crew to assist this industry. Twitter him or something, he’s all over and does respond to jumps in new membership if they’re all from people requesting a similar assistance from a similar industry. Link him to this page. Judicial Watch keeps their finger on the pulse and I keep their bumper sticker on my truck.
Ahhh, the trolls are back. Talk of racial strife and heavy handed government brings them out salivating for free handouts and the opportunity to shill their propaganda, happens every time. Self defeating defeatist attitudes, oh this is the only way wish there was something else but we’re simply going to have to expand government with more tax subsidies, there is no other way. Before you go on about slaves and such, remember it is you and me both whom are economic slaves under the current federal reserve system. There is no subsidy possible to help people with what’s coming. Regardless of race, your economic fate is already sealed. I know it is easier to look away, but take a minute to look at the real time economic debt and income counters, watch in amazement as the numbers fly by, be sure to contrast spending vs intake. I’ll be standing by with more data if you can parse how much is going to which racial class, who’s spending more, who’s paying in more. Enlighten me with your knowledge of both corporate and citizenry based welfare program application, and how that effects both peoples ability to access financial tools, as well as properly maintain their financial positions.
“EQUALITY! EQUALITY! EQUALTIY!”…..But only for one group? Did I read the definition of equality wrong? Suffering, struggling, and low-income issues impact all walks of life and do not single out any one heritage or skin tone. Programs need to be available to all those in need or they are in fact the definition of BIAS. All the current talk about bias? Well, right there it is. THE VERY DEFINITION OF BIAS, purported under the ruse of ending bias.
This is so racist it is unbelievable no one is being called on it. it would be like saying all “old” white appraisers are racist…uh, oh, wait a minute, ah yes, that narrative is already being spewed by Maxine Waters. Gee, come to think of it, not only is the white reference racist, but the term “old” would seem to me to be age discrimination also. Got to give it to her, a two-fer with no consequences from the left OR the right.
It’s reverse discrimination. So let’s help out a group of people (let’s say black as an example – I know that’s racist) and make special accommodations for them: lower the “standards”. Lower the education level, Specially select them when it comes to job assignments all in the name of “Equality”. Excuse me, but everyone has had an opportunity to go to school in this nation (it’s the law). ONLY one needs to apply themselves. Oh wait, he just graduated H.S. but cannot read, write or do math but is on his way to be an appraiser. We set aside money and programs to help him out. What can go wrong?