What the poor endure – New ways to red line

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Redlining a practice of discrimination outlawed by the civil rights laws of 1960’s has a new face. Most of the homes in our poor community cost less than 50 thousand dollars. Conveniently the standard mortgage companies will not extend a loan of less than 50 thousand dollars for a mortgage. So a really nice family with two teachers that want to move into our community and bring a standard of morality, stability, and work ethic cannot buy a house because the mortgage companies will not allow them to have an equitable loan in this community.

Another under-middle-class family, with a modest income, and an excellent credit record, and 30 years of work record also cannot get a mortgage from a reputable lender. Such families must turn to the loan sharks that will charge 12-18% interest, three time the interest for a normal mortgage. So a small loan of 28,000.00 ends up costing a poor family 108,000.00. Where a normal mortgage would cost 50,760.00. (A huge amount for people making $20,000.00 a year.) Just like the days of extreme discrimination where loans were red lined so black people could not get loans based upon race, now the poorer-class cannot get loans base on socioeconomic lines.

What this says, America holds on to the accepted practice of discrimination. Our new accepted discrimination focuses less on race and more on economic status. The poorer communities in our land suffer from the disengagement of financial equity. Think how difficult home sales would be in any community where reasonable financing remained inaccessible. Only those who pay cash may buy. What would happen to housing values? How would you be able to sell your house? Since this happens among the poorer-class no one seems to care or take notice. It is easily explained away as too high risk a market. But in the two real cases mentioned above such excuses just do not hold true. Some among the poorer-class and some among the working class would like to live in these communities to offer some stability, or simply to have a home. Discriminating against such communities stands as a long term practice of a very un-great America.

With all the talk about making America great again, what help comes from our financial institutions, or our government to stop this new reign of red-lining of poor communities. This is discrimination in its rawest form, discrimination based upon the value of a home or community. Simply said it is legal to discriminate against the poor. Thus poor communities will continue to be poor. Renters will be held in bondage to terrible landlords, and home ownership which used to be a mark of what made America great will be relegated to those who have lots of money and live in expensive homes. Lenders should morally be bound to allow mortgages of less than 50,000.00 to ensure that those who would invest in poorer communities may invest. Further that those compelled by a sense of justice or simply a desire to have their own place may participate in the great American dream of home ownership.

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About the Author:

Dr. Brown the pastor of Military Ave. Church in one of America’s poorest neighborhoods since 1989 where he serves with his wife Barb. He holds D.min and M.div from Gordon-Conwell. He authored Justice Matters a book addressing compassion ministries among the poor. His children now grown still worship and serve at Military Ave. Church.

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