Systemic racism in Illinois home loan and banking industries

[Southpaw at Law]

1. It is everywhere and affecting Black and other communities of color

Mortgage lenders do engage in systemic racism. They try to disguise it as the “risk” factor for repayment.

Certain groups, primarily those of color or who have difficulty understanding English (because it is not their primary language) are offered higher interest loan rates than Caucasians. With the language barrier, lenders hide balloon payments in the mortgage documents (this is a big problem in the Hispanic community in California). Interest free loans are offered and lenders promise the borrowers can refinance later to avoid the larger payments, but it is an empty promise and the bank takes their homes.

The problem is that systematic racism exists in the employment sector as well. So lenders can claim a borrower’s employment has gaps in it, and the lender can classify the borrower as a higher risk.

I am glad there is renewed interest in it but it seems that it has been a glaring problem for decades.