Higher-income Black families received subprime mortgages more than low-income white families

Evidence

Much of the current research attributes the racial homeownership gap to historical governmental discrimination and discrimination in the mortgage lending industry, both of which are indeed real problems. White Americans have benefited from what the IASP study calls “residential segregation by government design,” as well as more generations of family wealth building, which often reduces borrowing for down payments. And while mortgage discrimination may be illegal, it remains alive and well today. Twenty-seven percent of black applicants and 19 percent of Latinx applicants were denied mortgages in 2015, compared with 11 percent of white and Asian American applicants. Research also showed that in 2006, at the height of the real estate boom, black families making more than 200,000 of income per year on average were more likely to get a subprime mortgage than white families with less than 30,000 of income. (A subprime mortgage, which has a higher interest rate, is generally offered to borrowers considered too high-risk to qualify for a conventional mortgage, but a borrower with 200,000 of income would not normally be considered riskier than a borrower with only 30,000 of income.) White Americans are far less likely (26 percent) than black (53 percent) and Latinx (47 percent) Americans to have subprime mortgages. And even though higher interest rates may mean higher mortgage interest deductions, those come at the expense of building equity, as the higher interest payments mean homebuyers are reducing their principal very slowly—if at all. — Dorothy A. Brown, The Whiteness of Wealth, 223

Research also showed that in 2006, at the height of the real estate boom, black families making more than 200,000 of income per year on average were more likely to get a subprime mortgage than white families with less than 30,000 of income. (A subprime mortgage, which has a higher interest rate, is generally offered to borrowers considered too high-risk to qualify for a conventional mortgage, but a borrower with 200,000 of income would not normally be considered riskier than a borrower with only 30,000 of income.) — Dorothy A. Brown, Getting to Reparations, 1279

Categorization

• QUESTION: This subprime-by-race-even-at-same-income finding is a strong hook — what counts as ‘subprime’ in the 2006 dataset, and does the 2015 denial data show the same income-controlled pattern?
• XREF: Connects to the reader’s stated purpose: mortgage interest deductions as a race-neutral provision that benefits those with conventional loans and equity — precisely those excluded by subprime terms. — connects to: Predatory sub-prime lending preyed on America’s poor and racialized communities — Max Haiven, Cultures of Financialization, 154
• corroborated: 2 independent passages support this claim — Dorothy A. Brown, The Whiteness of Wealth: How the Tax…, 223; Dorothy A. Brown, Getting to Reparations: How Building a…, 1279