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Different media outlets have publicized this story by claiming that this program was just for Black and Latino buyers (pretty racist for a company to sell diffe

Different media outlets have publicized this story by claiming that this program was just for Black and Latino buyers (pretty racist for a company to sell different products and have different policies for people based on race), while this story says that this program is in historically Black and Latino neighborhoods. Kind of a difference if it's open to all people or not. Which is it? Personally, I'd say that the ''bankers'' are using the guise of ''helping the people of color'' to actually prey on them. This is a slam dunk setup for another government bailout (''Help us Uncle Sam, so many people defaulted on their loans, nobody could see this coming.'') as well as taking control of lots of property during the next economic downturn.

joemazerino 4y ago
Precisely! Also helps to tap into government subsidies by helping minorities. Both racist and predatory.
cercatrova 4y ago
The US government made money from the 2008 bailout. I don't understand why people think it was free money to the banks. No, they were loans that were fully paid back with interest.
- ericns 4y ago
  - cercatrova 4y ago
    Nowhere in this article is there a relation to bank bailouts. And I don't need your snide quips either.
    - logicalmonster 4y ago
      > Nowhere in this article is there a relation to bank bailouts. Of course there is (when you remember the 2008 housing crash and think a step or two ahead) During good times, putting lots of poor-ish people into homes they can just barely afford is a feel-good story. During bad times, when people get laid off and many of these people can likely no longer afford their home, it creates a shit-storm of epic proportions that negatively affects everybody.
      - cercatrova 4y ago
        Does it affect everybody? I and many people I know didn't feel any effects from 2008. If anything it just gave us a chance to buy homes that were previously skyrocketing in price.
        logicalmonster 4y ago
        > I and many people I know didn't feel any effects from 2008. I'm sure some people had the opportunity to go from poor to wealthy during the Great Depression by taking advantage of the situation in some way. Does that mean that the Great Depression was a net benefit for humanity?
  - dang 4y ago
    Could you please stop breaking the site guidelines? You've unfortunately done it quite a bit and we eventually have to ban such accounts. We're trying for a different sort of forum, if possible. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of HN more to heart, we'd be grateful.
- sp527 4y ago
  This is fugazi concocted by the financial industry to mislead the public. The devastation they wrought on the economy and the consequences for ordinary people weren't fully captured by those loans. For example: the Fed's aggressive quantitative easing policy that had been in effect for more than a decade post 08.
bergenty 4y ago
Well it’s not, Bank of America says it’s available to first time buyers of all races so your insinuation is actually racist. On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout.
- Rebelgecko 4y ago
  The less charitable assumption is that it's a way to help gentrify these communities by making it easier for people to buy in what are now cheaper neighborhoods. Raising home prices means more money for banks on future mortgages.
- logicalmonster 4y ago
  > Well it’s not, Bank of America says it’s available to first time buyers of all races That's what I was asking for above. Both the media reporting about this and even their own press release makes this story a bit ambiguous. > so your insinuation is actually racist. Normally I'd smirk in being called racist for advocating treating all races equally, but I'd like to simply state that the media reporting on what this program actually is has been extremely confusing. That's why I asked what this program was for up above and pointed out that a program that treated different races differently would be racist. > On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout. I view this as penny-wise and pound-foolish thinking. The resulting economic fallout of getting people in homes that they can't afford in a downturn and the resulting bailouts that would happen is much worse for most poor people in the long-run.
hnburnsy 4y ago
Insurance companies are not allowed to redline (excluding an area where they offer their product), and then use the excuse of 'not targeting by race' by claiming they excluded everyone, not just POC. Feels like the reverse of offering a product only in a certain area should be true.
- aaaaaaaaata 4y ago
  Someone earned their bonus here.
mechagodzilla 4y ago
Historically in the US, white people and white neighborhoods have gotten substantially better loan availability and terms (and disproportionately higher appraised home values) than minorities or people living in neighborhoods with large minority populations. See: https://en.wikipedia.org/wiki/Redlining https://en.wikipedia.org/wiki/Redlining for a very concrete example.
- logicalmonster 4y ago
  > white people...have gotten substantially better loan availability I've heard this said a lot of times, but this feels more like a slogan than an actual data point to me. Bad statistics are endemic in these sorts of discussions. Is this statistic comparing all Black people to all White people or is this a clear apples-to-apples comparison? And where do other races like say Asians fit into this here? Apparently, Asians make even more in America than average White people (according to stats I've seen) so do they get better loan terms than White people? And if they do, is it because of their race, or because they make more money? If racism exists, is it affecting Asians in the same way? And if not, why not? I'm not going to completely dismiss your comment and I want everybody to do well, but I think it merits a much deeper investigation for full understanding.
  - WorldMaker 4y ago
    There's 107 primary sources at the bottom of the linked Wikipedia page alone if you wanted to do the research towards a "full understanding".
    - taxyz 4y ago
      I am not commenting on anything to do with the discussion at hand, purely just commenting on Wikipedia and the idea of "primary sources." Wikipedia articles are not really vetted by any authority nor are the sources. Anyone can simply add citations to claims; there are no standards for what constitutes a valid source other than a URL exists to some resource. You can even take a benign article about something that is not political and start clicking through the sources and realize a lot of them don't support the claim they were cited to support on Wikipedia. In my experience, its less than half the sources I've clicked on are credible and support the claim but this is anecdotal. A lot of Wikipedia is editing by people with ulterior motives now that its so often presented and received as fact.
015UUZn8aEvW 4y ago
Restrictive lending standards for minorities is redlining, which is racism. Permissive lending standards for minorities is predatory lending, which is also racism.
- mijamo 4y ago
  That actually sounds right. Anything that treats people differently because of a so called "race" is racist.
  - sfvegandude 4y ago
- rocket_surgeron 4y ago
  I suppose this is racism the same way SNAP is classism. "WhY cAn'T i GeT fReE fOoD???? This is class discrimination!" -015UUZn8aEvW
  - sfvegandude 4y ago
- camgunz 4y ago
  This seems materially different than the predatory adjustable rate mortgages pushed on minority communities in the 90s-00s. They're assessing creditworthiness using other metrics to try and work around institutional racism, not pushing bad mortgages on people who can't afford them. I deeply mistrust banks, but I don't find anything outwardly malicious here.
  - taxyz 4y ago
    The loans they are proposing do not require any down payment, have no closing costs, and do not factor in credit score. There are a couple things here that are predatory in the same way that the loans in the 90's-00's were. First, the no down payment means that the borrower would have no equity in the home. Most mortgages are very front loaded with interest. If something were to happen in which the borrower had to get out from the house/loan they would be in a very precarious financial situation since the seller is responsible for the agents' fees and commission. Second, and I may not be sure how this works, but no closing costs means that presumably there isn't an escrow account set up with any prepaids such as taxes. The article doesn't really touch on this but worse case scenario this means that the borrower could be surprised by huge tax bills? Third, if the bank is not using credit score, and is taking on all the risk by issuing loans that are 100% LTV, I can't imagine the interest rates are going to be favorable to the borrower which kind of exacerbates my first point above, where the borrow is going to be making huge interest payments and not building any equity. Bank of America is not stupid and they are certainly not a charity. To me this seems kind of predatory. I am sure they have run the numbers on what the risk is, how many borrowers they expect to default, what they anticipate making, etc. If this isn't predatory towards black or latino people, they should release those numbers.
tarakat 4y ago
> this story says that this program is in historically Black and Latino neighborhoods. Kind of a difference if it's open to all people or not. Even if open to all people, this is a clear case of disparate impact [1], which runs afoul of the Civil Rights act. But I wouldn't hold my breath for an even application of the law. [1] https://en.wikipedia.org/wiki/Disparate_impact https://en.wikipedia.org/wiki/Disparate_impact
anm89 4y ago
Why is it less racist to do something which you know will statistically generate the exact same outcome as something you'd consider racist but to add a step of indirection to it?
jiscariot 4y ago
Agreed--there is potential in seven years, fallout from this will be dubbed as racially-targetted, predatory lending, and it would be difficult to argue with. Prior to the 2008 housing crisis Bush made big push for home-ownership ("ownership society") for everyone, and we saw the subsequent hordes of zero down payment mortgages, etc.

joemazerino 4y ago

Precisely! Also helps to tap into government subsidies by helping minorities. Both racist and predatory.

cercatrova 4y ago

The US government made money from the 2008 bailout. I don't understand why people think it was free money to the banks. No, they were loans that were fully paid back with interest.

ericns 4y ago
- cercatrova 4y ago
  Nowhere in this article is there a relation to bank bailouts. And I don't need your snide quips either.
  - logicalmonster 4y ago
    > Nowhere in this article is there a relation to bank bailouts. Of course there is (when you remember the 2008 housing crash and think a step or two ahead) During good times, putting lots of poor-ish people into homes they can just barely afford is a feel-good story. During bad times, when people get laid off and many of these people can likely no longer afford their home, it creates a shit-storm of epic proportions that negatively affects everybody.
    - cercatrova 4y ago
      Does it affect everybody? I and many people I know didn't feel any effects from 2008. If anything it just gave us a chance to buy homes that were previously skyrocketing in price.
      - logicalmonster 4y ago
        > I and many people I know didn't feel any effects from 2008. I'm sure some people had the opportunity to go from poor to wealthy during the Great Depression by taking advantage of the situation in some way. Does that mean that the Great Depression was a net benefit for humanity?
- dang 4y ago
  Could you please stop breaking the site guidelines? You've unfortunately done it quite a bit and we eventually have to ban such accounts. We're trying for a different sort of forum, if possible. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of HN more to heart, we'd be grateful.
sp527 4y ago
This is fugazi concocted by the financial industry to mislead the public. The devastation they wrought on the economy and the consequences for ordinary people weren't fully captured by those loans. For example: the Fed's aggressive quantitative easing policy that had been in effect for more than a decade post 08.

bergenty 4y ago

Well it’s not, Bank of America says it’s available to first time buyers of all races so your insinuation is actually racist. On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout.

Rebelgecko 4y ago
The less charitable assumption is that it's a way to help gentrify these communities by making it easier for people to buy in what are now cheaper neighborhoods. Raising home prices means more money for banks on future mortgages.
logicalmonster 4y ago
> Well it’s not, Bank of America says it’s available to first time buyers of all races That's what I was asking for above. Both the media reporting about this and even their own press release makes this story a bit ambiguous. > so your insinuation is actually racist. Normally I'd smirk in being called racist for advocating treating all races equally, but I'd like to simply state that the media reporting on what this program actually is has been extremely confusing. That's why I asked what this program was for up above and pointed out that a program that treated different races differently would be racist. > On a side note, I can’t imagine a better reason for a government bailout— if it results in tens of thousands of first time buyers owning a home, many of whom would continue to do so regardless of the bailout. I view this as penny-wise and pound-foolish thinking. The resulting economic fallout of getting people in homes that they can't afford in a downturn and the resulting bailouts that would happen is much worse for most poor people in the long-run.

hnburnsy 4y ago

Insurance companies are not allowed to redline (excluding an area where they offer their product), and then use the excuse of 'not targeting by race' by claiming they excluded everyone, not just POC. Feels like the reverse of offering a product only in a certain area should be true.

aaaaaaaaata 4y ago
Someone earned their bonus here.

mechagodzilla 4y ago

Historically in the US, white people and white neighborhoods have gotten substantially better loan availability and terms (and disproportionately higher appraised home values) than minorities or people living in neighborhoods with large minority populations. See: https://en.wikipedia.org/wiki/Redlining https://en.wikipedia.org/wiki/Redlining for a very concrete example.

logicalmonster 4y ago
> white people...have gotten substantially better loan availability I've heard this said a lot of times, but this feels more like a slogan than an actual data point to me. Bad statistics are endemic in these sorts of discussions. Is this statistic comparing all Black people to all White people or is this a clear apples-to-apples comparison? And where do other races like say Asians fit into this here? Apparently, Asians make even more in America than average White people (according to stats I've seen) so do they get better loan terms than White people? And if they do, is it because of their race, or because they make more money? If racism exists, is it affecting Asians in the same way? And if not, why not? I'm not going to completely dismiss your comment and I want everybody to do well, but I think it merits a much deeper investigation for full understanding.
- WorldMaker 4y ago
  There's 107 primary sources at the bottom of the linked Wikipedia page alone if you wanted to do the research towards a "full understanding".
  - taxyz 4y ago
    I am not commenting on anything to do with the discussion at hand, purely just commenting on Wikipedia and the idea of "primary sources." Wikipedia articles are not really vetted by any authority nor are the sources. Anyone can simply add citations to claims; there are no standards for what constitutes a valid source other than a URL exists to some resource. You can even take a benign article about something that is not political and start clicking through the sources and realize a lot of them don't support the claim they were cited to support on Wikipedia. In my experience, its less than half the sources I've clicked on are credible and support the claim but this is anecdotal. A lot of Wikipedia is editing by people with ulterior motives now that its so often presented and received as fact.

015UUZn8aEvW 4y ago

Restrictive lending standards for minorities is redlining, which is racism. Permissive lending standards for minorities is predatory lending, which is also racism.

mijamo 4y ago
That actually sounds right. Anything that treats people differently because of a so called "race" is racist.
- sfvegandude 4y ago
rocket_surgeron 4y ago
I suppose this is racism the same way SNAP is classism. "WhY cAn'T i GeT fReE fOoD???? This is class discrimination!" -015UUZn8aEvW
- sfvegandude 4y ago
camgunz 4y ago
This seems materially different than the predatory adjustable rate mortgages pushed on minority communities in the 90s-00s. They're assessing creditworthiness using other metrics to try and work around institutional racism, not pushing bad mortgages on people who can't afford them. I deeply mistrust banks, but I don't find anything outwardly malicious here.
- taxyz 4y ago
  The loans they are proposing do not require any down payment, have no closing costs, and do not factor in credit score. There are a couple things here that are predatory in the same way that the loans in the 90's-00's were. First, the no down payment means that the borrower would have no equity in the home. Most mortgages are very front loaded with interest. If something were to happen in which the borrower had to get out from the house/loan they would be in a very precarious financial situation since the seller is responsible for the agents' fees and commission. Second, and I may not be sure how this works, but no closing costs means that presumably there isn't an escrow account set up with any prepaids such as taxes. The article doesn't really touch on this but worse case scenario this means that the borrower could be surprised by huge tax bills? Third, if the bank is not using credit score, and is taking on all the risk by issuing loans that are 100% LTV, I can't imagine the interest rates are going to be favorable to the borrower which kind of exacerbates my first point above, where the borrow is going to be making huge interest payments and not building any equity. Bank of America is not stupid and they are certainly not a charity. To me this seems kind of predatory. I am sure they have run the numbers on what the risk is, how many borrowers they expect to default, what they anticipate making, etc. If this isn't predatory towards black or latino people, they should release those numbers.

tarakat 4y ago

> this story says that this program is in historically Black and Latino neighborhoods. Kind of a difference if it's open to all people or not. Even if open to all people, this is a clear case of disparate impact [1], which runs afoul of the Civil Rights act. But I wouldn't hold my breath for an even application of the law. [1] https://en.wikipedia.org/wiki/Disparate_impact https://en.wikipedia.org/wiki/Disparate_impact

anm89 4y ago

Why is it less racist to do something which you know will statistically generate the exact same outcome as something you'd consider racist but to add a step of indirection to it?

jiscariot 4y ago

Agreed--there is potential in seven years, fallout from this will be dubbed as racially-targetted, predatory lending, and it would be difficult to argue with. Prior to the 2008 housing crisis Bush made big push for home-ownership ("ownership society") for everyone, and we saw the subsequent hordes of zero down payment mortgages, etc.