Racist Real Estate Predators in Baltimore

May 11, 2015 | Revolution Newspaper | revcom.us

 

Anyone who watched the TV show, The Wire remembers the scenes of rows and rows of boarded up houses in Baltimore where today there are some 16,000 vacant buildings. How did this happen? Well, some of this happened because of racist real estate predators.

Jim Crow was very much alive and well in Baltimore just a generation ago—with blatant segregation that dictated “white” and “colored” bathrooms and open policies of discrimination in every aspect of life, including in housing where Black people were prevented from living in certain neighborhoods.

Today there is a new Jim Crow that delivers the discrimination and racist practices in new ways. For example Baltimore is a city infamous for the practice of “redlining.”

Redlining in housing refers to the practice of banks refusing loans and mortgages to certain people or charging them higher rates in a discriminatory, racist way. The U.S. government used to do this OPENLY.

The Home Owners’ Loan Corporation (a government-sponsored corporation created as part of the New Deal) would assess “mortgage-lending risk” in a city, neighborhood by neighborhood in different U.S. cities. It would gather information: terrain, type and age of buildings, sales and rental demand, and about the “threat of infiltration of foreign-born, negro, or lower grade population.” This data would be used to delineate neighborhoods as being desirable “hot spots” in green to “high risk” in red. (“After Nearly a Century, Redlining Still Divides Baltimore, Laura Bliss,” citylab.com)

The 1968 Fair Housing Act in 1968 made this kind of government-sanctioned segregation illegal. But redlining and other racist practices in real estate continue in other ways.

In 2008 a suit was brought to trial where Baltimore officials exposed how for decades, Wells Fargo Bank systematically singled out Black families in Baltimore and suburban Maryland for high-interest subprime mortgages.

One loan officer of the bank testified in court that Wells pushed Black customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit that employees had referred to Blacks as “mud people” and to subprime lending as “ghetto loans.”

The effect from this was devastating. About 4,500 homeowners in Baltimore and Washington, DC had been affected by these practices. When the housing market crashed, many of these borrowers ended up facing mortgage payments that they simply couldn’t afford. Data released by the city as part of the suit showed that more than half the properties subject to foreclosure on a Wells Fargo loan from 2005 to 2008 now stand vacant. And 71 percent of those are in predominantly Black neighborhoods. (New York Times, June 6, 2009)

Last year Baltimore had 5,200 foreclosures—the ninth largest number in the country.

 

 

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