Tag Archives: race

February 19, 2009 · 8:27 am

News Day 2/19/09: Housing plan in MN / “Nation of cowards” on race / Carstarphen leaving SPPS? / more …

What part of “no” don’t you understand, Norm? The three-judge panel yesterday “just said no” to the Coleman campaigns latest request to reverse a previous ruling. Writing in MinnPost, Eric Black reminds us that, like every ruling in the case, this one was unanimous.

Mortgage relief on horizon Dan Olson on MPR talked to local homeowners and U of M law school housing expert Prentiss Cox about the Obama mortgage relief plan. The plan provides some refinancing by some lenders, and extends relief to some homeowners who are “under water” — so long as the gap between their home value and amount owed is not too great. Cox faults the plan for failing to provide a “cram-down,” a provision that would make banks agree to take a loss on a mortgage when the home is worth less, and write a new mortgage for a lower amount.

Many big banks, including Wells Fargo, suspended mortgages while waiting to hear about the president’s plan. According to the NYT, one in ten home mortgages is either delinquent or in foreclosure. The plan will provide incentives to lenders to rewrite mortgages, changing the interest rate to make them more affordable. It will increase available credit through $200 billion in backing for Fannie Mae and Freddie Mac. And it will offer some homeowners who are current on their mortgages but cannot refinance because they lack enough equity an opportunity to refinance at the current low interest rates. The plan also calls for bankruptcy rule changes to let judges reduce mortgages on primary residences to fair market value.

Take a look at the White House summary of the plan here. And for a critique that says the plan is “comprehensive, but not aggressive” enough, see Simon Johnson in The New Republic.

Over at the legislature According to AP, GOP lawmakers are proposing–and DFLers are “open to looking at” –a five percent pay cut for legislators, which would cut base pay to $29,600, saving the state a whopping $338,000 a year. Let’s see – that’s less than one percent of one percent of the $4.8 billion deficit. Hope they don’t spend a lot of time debating that one. Another bill would require MN students to stay in school through 18 or through high school graduation, rather than the current compulsory school attendance through 16, writes Jake Grovum in the Strib. Critics say it would cost a lot and that schools aren’t very good. Wisconsin, South Dakota and 16 other states already have 18-year-old attendance laws. And in what we can devoutly hope is a lost cause, the Vikes are still trying to get public money for a nearly one billion dollar stadium this year, reports Mike Kaszuba in the Strib.

“Nation of cowards” on race Attorney General Eric Holder spoke yesterday at the DOJ African American History Month program. Among his remarks:

One cannot truly understand America without understanding the historical experience of black people in this nation. Simply put, to get to the heart of this country one must examine its racial soul.

Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and continue to be, in too many ways, essentially a nation of cowards. Though race related issues continue to occupy a significant portion of our political discussion, and though there remain many unresolved racial issues in this nation, we, average Americans, simply do not talk enough with each other about race. It is an issue we have never been at ease with and given our nation’s history this is in some ways understandable. And yet, if we are to make progress in this area we must feel comfortable enough with one another, and tolerant enough of each other, to have frank conversations about the racial matters that continue to divide us.

Read the whole speech here. It’s well worth reading, thinking about, and responding to his call.

Sez who? A day after a study showing a 97% thumbs down on NCLB from MN principals, the Strib reports that a DC-based think tank said MN is too easy on enforcement of NCLB rules, and that WI has the loosest interpretation of all 50 states. What the press reports don’t say is that the Thomas B. Fordham Foundation is a conservative think tank, led by Chester Finn, “one of the education policy gurus of the conservative movement” with ties to the Manhattan Institute, the Hudson Institute, Center of the American Experiment, and National Association of Scholars.

Carstarphen looks south St. Paul School Superintendent Meria Carstarphen is a finalist for the Austin, Texas superintendent’s job, reports Emily Johns in the Strib. She’s in her third year with SPPS, has not yet signed a new contract, and has her Summit Avenue house up for sale.

RNC 8 on Democracy Now You can hear from RNC 8 defendant Luce Guillens-Givens and attorney Jordan Kushner on Democracy Now. Not much that’s new, as the judicial process continues, except for criminal charges against one of the FBI informants.

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February 12, 2009 · 8:20 am

Report documents mortgage discrimination in Minneapolis, St. Paul

Lenders discriminate. Housing is segregated. Communities of color are hit harder by the foreclosure crisis than anyone else. That’s the ugly face of racial discrimination in the Twin Cities revealed in a 54-page report released by the Institute on Race and Poverty at the University of Minnesota Law School.

People of color “continue to receive home loans on worse terms and at a higher cost than similarly situated white borrowers, according to “Communities in Crisis: Race and Mortgage Lending in the Twin Cities”. Higher incomes did not protect people of color from lending disparities, with high-income black, Latino and Asian applicants denied loans at higher rates than low-income white borrowers.

Very high income black, Hispanic and Asian applicants (applicants with incomes more than $157,000 per year) show denial rates higher than whites in the lowest-income category (less than $39,250 per year). The disparities are greatest for black borrowers. The denial rate for blacks with incomes above $157,000 was 25%, while it was just 11% for Whites making less than $39,250.

Prime and subprime: What they are, why they matter

“Prime loans are the standard home loans that have allowed high rates of homeownership and housing mobility in the United States. Subprime loans have higher interest rates than prime loans and often contain additional features and costs that are absent in prime loans. Subprime loan features can include prepayment penalties; adjustable rate mortgages where interest rates are adjusted periodically; interest only loans, where the borrower only pays for the interest on the principal of the loan; and balloon payment mortgages, where interest rates climb towards the end of the loan. …

“Segregated neighborhoods of color, neighborhoods where more than 50 percent of the residents are people of color, receive disproportionate numbers of subprime loans. …
Although not all subprime loans are predatory, most predatory loans are found in the subprime market.”

Borrowers of color, even if they have high incomes, “are more likely to receive subprime loans than in any white income group,” found the study, thereby increasing the amount that they pay for loans and their risk of foreclosure.

A few decades ago, homeowners typically looked to neighborhood banks for their mortgages. Then home lending practices changed. Mortgage brokers and automated underwriting meant less connection between lender and borrower. “Loan securitization,” based on sales of mortgages, spread and eventually became the basis of the current financial crisis. All of these factors made the mortgage market more complex, encouraged high risk lending, and encouraged high-risk, predatory lending.

Calling homeownership “the first step to building stability and wealth” for families, the study points out that discriminatory lending has “cost another generation of people of color the equal opportunity to join America’s middle class,” despite the 40-year-old fair housing legislation passed as a consequence of the civil rights movement.

This wealth can be leveraged in numerous ways including moving “up,” into better neighborhoods and homes, co-signing loans to ensure that one’s children become homeowners, and starting businesses.8 Racial discrimination has greatly reduced access for people of color and communities of color to these long-term wealth building benefits of home ownership.

Twin Cities: Pattern of discrimination

Discrimination in lending also has maintained and reinforced housing segregation across the country and in the Twin Cities. Twin Cities neighborhoods are highly segregated by race, and neighborhoods with higher non-white populations have less access to banks and higher percentage of subprime mortgages. Lenders tend to specialize, offering either prime or subprime loans. In the Twin Cities, bank branches are less likely to be located in minority communities, with a study by the National Community Reinvestment Coalition showing the metro area ranking last of 25 large metropolitan areas studied.

North Minneapolis shows the severity of the discrimination/subprime lending/foreclosure impact on a community. The IRD study found a foreclosure rate of two percent in Hennepin and Ramsey counties overall, but 12 percent for North Minneapolis, which it described as “the most segregated and lowest-income area in the Twin Cities.”

Banks made few prime loans in North Minneapolis, while subprime lenders dominated the market. Overall, 1.7 percent of home purchase loans were made in North Minneapolis, and 49 percent of these were subprime, compared to 14 percent subprime in the area as a whole.

For example, the region’s largest prime lender, Wells Fargo Bank, NA, made just 286 of its home purchase loans in North Minneapolis out of a regional total of 35,272. If North Minneapolis had received a proportionate amount of Well Fargo’s loans, it would have received more than twice as many loans—1.7 percent or a total of 616 loans.

On the other hand, TCF has made a disproportionately large share of loans in North Minneapolis. But even homeowners with “good” loans have been affected by the overwhelming number of foreclosures in the community, which have driven down home values and made neighborhoods less stable.

What happened to the laws?

The IRD study reviews the extensive list of laws prohibiting discrimination in housing and in lending, but finds that “The federal and state governments have not enforced fair lending laws, allowing lenders to engage in illegal discriminatory behavior with little threat of punishment.” The Bush administration rolled back enforcement, so that lenders have little fear of getting caught and, even if they are caught, pay small penalties. Private civil rights lawsuits have increased, but the expense of suing is high, and lawsuits drag on for years.

The IRD study recommends some steps to address the problem of racial discrimination in housing and lending, including calls to:

• work aggressively to end segregation;

• enforce existing laws, both federal anti-discrimination laws and Minnesota laws curbing predatory lending practices;

• strengthen the Community Reinvestment Act to “increase access to affordable, prime credit for people who live in segregated communities of color;”

• re-establish a regional Fair Housing Center to bolster enforcement of anti-discrimination laws.

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February 2, 2009 · 9:13 am

News Day – February 2: Health at risk, MN not-so-nice for minorities, Punxsatawney Phil and more

Health at risk No, not salmonella this time — the bigger health risk comes from lack of money. Kathlyn Stone, writing in the TC Daily Planet, tells the story of Jean Bender, who “is worried about the next round of Health and Human Services cuts that will make it harder to afford the care needed by her developmentally and physically disabled child.” Chen May Lee reports in the Star Tribune that more than a thousand local health care employees have been laid off since last year, and big construction projects have been postponed as the recession means people just can’t pay for health care.

“In the past, people were delaying vacations or new automobile [purchases],” said Steve Hine, director of labor market information at the Minnesota Department of Employment and Economic Development. “This time around, they’re even cutting back on their health care.”

Meanwhile, the Daily Planet reports on the debate in the legislature over single-payer health care reform.

Minnesota not-so-nice “Economically, Minnesotans are blessed with a Lake Wobegon, above-average life. As long as they’re white,” writes Richard Chin in the PiPress. In appalling and statistically-backed detail, he goes on to describe a state where whites are better off than the rest of the nation as measured by income, unemployment and poverty levels, and black Minnesotans are worse off, and where the gaps between white and black Minnesotans continue to grow. Read the whole article for an alarming wake-up call.

Punxsutawney Phil: ONLY six more weeks of winter! I’ve never understood why the groundhog seeing his shadow was so bad. Here in the northland, ending winter on St. Patrick’s Day, instead of suffering through another round of March blizzards, sounds pretty good.

DTV or no TV? If the scheduled switchover to all-DTV goes ahead as planned on February 17, more than six million U.S. households will see nothing but snow on their screens, according to the latest Nielsen figures. After Senate voted unanimously to delay DTV until June, the House voted down the delay, but now is scheduled to take a second look later this week. Funds for the $40 coupon to apply toward the cost of a digital converter box ran out weeks ago. (And then there’s the whole problem of antennas and of which wall in which room of your home a converter box/antenna set-up must be situated in order to work.) Martin Moylan reports on MPR that MN broadcasters are split on whether the delay is needed, and that some think it will cost them up to a thousand dollars a day to delay the switch.

Nullifying the amendment Conservation and arts advocates succeeded in getting the Clean Water, Land and Legacy Amendment passed to guarantee additional funding, because, they told voters, the legislature and governor couldn’t be counted on to maintain commitments to the outdoors, clean water, parks and arts projects. Now, reports Dennis Lien at MPR, they charge that Gov.Tim Pawlenty is about to slash arts adn conservation funding so that the amendment, instead of bringing new funding, will substitute for traditional funding sources. They point to a 50 percent cut for the State Arts Board and regional arts councils, a $1.9 million cut from MPCA clean water funds and $1.3 million from the DNR division of waters, along with a $5.5 million cut from the DNR’s fish and wildlife division. In the Strib, Doug Smith writes that DNR Fish and Wildlife funds will be cut, losing all of the $2.8 million general fund dollars previously allocated. That leaves the division funded “almost entirely” by hunting and fishing license fees, reducing funds for research on fish and wildlife populations and habitat, land and water habitat management, environmental review, shoreline restoration funds, and conservation officers.

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