Wells Fargo turned down most refinance apps for black homeowners
March 17, 2022
A Bloomberg survey found that Wells Fargo approved refinanced mortgages for only 47% of black homeowners who applied in 2020, compared to 72% of white homeowners.
Following the 2020 Federal Reserve interest rate cut, many homeowners refinanced their homes to pay lower interest rates on their mortgages, but the disparity between those who applied and those who got those lower interest rates increased the country’s already cavernous racial wealth gap. According to Bloomberg’s look at federal data, the racial wealth gap between white and black Americans has grown by a staggering $20 trillion during the pandemic.
While every bank the outlet looked at had higher refinance rates for white than black borrowers, Wells Fargo had by far the biggest gap. At JPMorgan Chase & Co., for example, 81% of refinance applications were approved for black borrowers and 90% for white borrowers. The disparity is not a result of income: Across the industry, high-income black applicants had about the same approval rates as low-income white applicants. Wells Fargo has long been plagued by scandals, paying out $184 million to the federal government in 2012 over predatory lending practices, and in 2020 paid $3 billion after opening 3.5 million current and credit accounts without customer authorization. In 2017, the city of Philadelphia sued Wells Fargo to steer black homeowners into predatory high-interest loans.
Demarcated neighborhoods face the brunt of the climate crisis
A report recently published in the journal Weather found that neighborhoods that were racially demarcated in the early 20th century are now hotter, have worse air quality, and residents are at greater risk of climate death. In the early to mid-20th century, the federal government mapped neighborhoods with high concentrations of black residents and refused to support private bank mortgages in those neighborhoods, claiming the mortgages were too risky. The practice became illegal with the passage of the Fair Housing Act 1968. The study looked at 108 urban areas across the country, finding that 94% had warmer temperatures in formerly demarcated neighborhoods, an average of 5 degrees Fahrenheit. Because racial redlining has marked low-income black neighborhoods as “risky” for real estate investment, these areas have “fewer environmental amenities that help clean and cool the air, including the canopy of urban trees “, according to the hypothesis of the report. More importantly, federal highways were built in low-income black neighborhoods in the 1950s, resulting in higher temperatures due to the heat-trapping property of asphalt and poor air quality from car exhaust fumes. Additionally, “Throughout the mid-1900s, large building complexes, including housing complexes, industries, and university campuses, often subsidized by the federal government, were also placed in demarcated areas, in largely because of cheap land,” and these buildings were constructed from dense materials like concrete that trap more heat, according to the study.
In California, the state is trying to add green amenities to low-income neighborhoods using cap-and-trade dollars, but faces the flip side of divestment: when those resources come in, displacement can follow. Last month I wrote about anti-eviction organizers in Oakland assigned to move the stem using those same cap-and-trade dollars.
Homeless New Yorkers face heightened safety concerns
A man charged with a series of multi-state murders of homeless people was arrested in DC on Tuesday. The 30-year-old suspect is accused of wounding two people and killing one person in DC earlier this month before traveling to New York where he allegedly killed another homeless person and shot another person in the shoulder. The New York shooting has renewed Mayor Eric Adams’ policy scrutiny of remove homeless New Yorkers from the subway rather than allowing them to shelter there for the night. Proponents say the measures are more likely to leave New Yorkers sleeping rough to avoid violence, risk of robbery and shelter system restrictions. But homelessness on the streets also puts New Yorkers at risk, as evidenced by this month’s shooting, the killing of a man who was sleeping in a stairwell in Novemberand the murders of four men in 2019.
“If the shelter system was safe for them, that would be a different story, but it’s not,” said Maria Walles, a formerly homeless New Yorker. says NY1. “We need a stoppage of policing that happens both on the subway and on the streets where people have been approached by the police with no real help,” said Helen Strom, of the purpose-built project. nonprofit Safety Net Project in the same interview.
gothamist interviewed homeless New Yorkers about the recent murders, all of whom said they still find the streets safer than the shelter system as a whole. VOCAL-NY, Open Hearts Initiative and Housing Works held a rally earlier this week to demand more resources in the wake of the violent shootings, including the reopening of the city’s one-stop hotel program for homeless people.
2021 was the deadliest year on record for homeless New Yorkers, with 640 homeless people dying across the city, according to at the city limits. The rise was driven by opioid overdoses, but people not housed also died from heart disease, accidents and alcohol abuse. The data also shows that 22 homeless New Yorkers were murdered last year, up from 10 in 2019. 16 homeless people also died from extreme cold in 2021 – up from four the year before – and two died from the extreme heat.
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