Bank Of America offers house keys to black and Spanish first-time home buyers

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Black and Latinx homeowners are finally getting a lift from one of the nation’s largest banks in the revived real estate market. Bank of America’s
BAC
new Community Affordable Loan Solution will be available in select cities for Black and Hispanic/Latino neighborhoods. Housing wealth has grown in 917 metropolitan areas from $15.9 trillion in 2010 to $24.1 trillion over a 10-year period. Closing the home equity gap is important, as home ownership is typically the single most important asset through which wealth can be acquired, according to the Brookings Institute.

The breakdown you need to know:

Black home ownership currently stands at just 45%, compared to white home ownership at 72%. CultureBanx reported that black and Hispanic households are not benefiting from the real estate gains felt by other demographics because house prices are soaring that families of color from their own neighborhoods are overpriced. This is why the Community Affordable Loan Solution can be a game changer as no minimum credit score or mortgage insurance is required and home buyer eligibility is based on income and location.

A recent report from LendingTree
TREE
found that the mortgage denial rate for black borrowers is twice that of the total population. If black home ownership equaled white home ownership, black wealth would increase by nearly $40,000, bridging racial wealth inequality by about 30%. In 2064, the average white family will likely own $2,782,727 in wealth, while the average black family’s wealth will be $789,164, according to a report by Elliott and Abacus Wealth Partners, which is an astonishing 70% inequality.

Living Wealth reinvented:

African Americans are left out of wealth-building through generations as they face rising rents and housing prices, disproportionate student loan debt, economic inequality from the coronavirus, and marry later on average, slowing home ownership and wealth-building capabilities. According to a 2018 survey by financial services firm Legal & General, they found that 43% of people under the age of 35 received help from parents or relatives when buying a home, which is not always an option for prospective black and Hispanic people. American homeowners.

Not all US banks are switching to home ownership. In particular Wells Fargo
WFC
(WFC -1.01%), the country’s third-largest bank by assets, is stifling ownership of black and Hispanic homes by rejecting refinancing applications from black homeowners, while nearly three-quarters of applications from white applicants are rejected. approved. An analysis by Bloomberg found that Wells Fargo’s approval rates of 47% and 53% gave it the worst record among major lenders when considering refinancing for black and Hispanic homeowners. Wells Fargo did not dispute Bloomberg’s statistical findings, but told the outlet that it takes the same approach for all potential borrowers and is more selective than other lenders.

Situational Awareness:

Unfortunately, homes in black communities are worth less than 50% of homes in white communities, perpetuating the inequality that prevents people of color from building stable economic security. All of this is the result of federal and state policies that continually prevent access to financial resources that could help, leaving black/Latin households less economic opportunities to fall back on when a crisis hits.

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