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Study: Blacks in Mahoning County receive more predatory loans



Published: Wed, June 19, 2013 @ 12:08 a.m.

mahoning county

Fair-housing study

reveals few complaints

By Burton Speakman

bspeakman@vindy.com

YOUNGSTOWN

Nearly half of Mahoning County’s black residents who bought a house in the county between 2004 and 2011 received a predatory loan, a fair-housing study shows.

The study shows 46.7 percent of blacks received a “loan with predatory-style characteristics,” said Robert Gaudin, director of research and planning for Western Economic Services LLC.

The American Bar Association website says a predatory loan is one that is lent based on the borrower’s equity in the property, and not on the borrower’s ability to repay the loan.

The company conducted a fair-housing study for NEO Sustainable Communities Consortium, which covers Mahoning and Trumbull counties.

For the Eastgate region, which includes Mahoning, Trumbull and Ashtabula counties, 42.8 percent of blacks received predatory loans, according to study information. This compares to 17.4 percent of whites between 2004 and 2011.

Despite these figures, Mahoning County did have a low number of fair-housing complaints, Gaudin said.

“Complaints were much lower than I expected for an area that size,” he said.

In addition, blacks in Mahoning County were denied for home loans 33.9 percent of the time, which was more than double the 14.7 percent denial rate for whites, Gaudin said.

“Blacks are getting denied at a much higher rate than whites,” he said.

“They are also being isolated geographically so their choices are limited.”

Gaudin presented additional information that showed blacks living primarily in Youngstown in areas that contain higher poverty rates.

The federal government won’t use this data to say it shows discrimination in the housing market, only that there are differences, Gaudin said.

The Rev. Kenneth Simon, pastor of New Bethel Church on Youngstown’s South Side, said, unfortunately, results like this are to be expected, and they are pretty much normal.

“This issue needs to be addressed, but the facts continue to validate the truth,” he said. “The most vulnerable of us are the most victimized.”

This disparity exists not just in housing, but also in employment, education and the criminal-justice system, the Rev. Mr. Simon said.

The key is to continue to fight against institutions that perpetrate unfair housing and other discriminatory tactics, Mr. Simon said.

The overall point of the study was to show where issues exist within Northeast Ohio and develop a vision of what this area should be, said Anthony Kobak, project manager for NEO Sustainable Communities Consortium.

Then the area needs to develop plans and find funding for programs to help make any necessary changes to make area housing more equitable, he said.

For information or to comment on the overall study go to www.neoscc.org.


Comments

1chuck_carney(499 comments)posted 1 year, 3 months ago

I am still unclear as to exactly how predatory lending is defined.

All mortgages and the corresponding interest rates are based on the owner's equity and his/her ability to repay the loan

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2SCOutofTowner(4 comments)posted 1 year, 3 months ago

I just don't understand. This sounds like a "damed if you do, damned if you dont" scenario. If you extend loans regardless of the applicants ability to pay it back (not enough income), loan institutions are criticized and the loan is called predatory. If the applicant is denied the loan because their income does not provide enough monthy money, then the loan institution is criticized for descrimation. Come on people, REALLY? What ever happened to the 25-30% rule? You cannot afford a loan payment that is more that this % of your monthly income. Sounds simple to me.

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3Lifes2Short(3877 comments)posted 1 year, 3 months ago

Just so tired of the discrimination complaints all the time. How come successful blacks never complain or say they were discriminated against. Maybe because they got a education, were responsible, found a job and are productive members of society.Everyone has that option, so instead of complaining about everything, move forward in life instead of bi@#ing and moaning about how unfair everything is. If you get over that you just might be successful in life.

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4walter_sobchak(1909 comments)posted 1 year, 3 months ago

"The key is to continue to fight against institutions that perpetrate unfair housing and other discriminatory tactics, Mr. Simon said."

Earlier in the article, a predatory loan is defined as one based on borrower's equity in the property. Later on, it is stated blacks are denied home loans at double the rate of whites, probably because they have minimal equity in the property. Does anyone see the problem here? It is staring at the borrower in the mirror! What do you expect a lender to do? Have a 99% stake in a home that you will turn around and treat like a pig sty? Lending institutions earn profits by renting money, not by owning property that has minimal value.

Wait, I have an idea. Why not be a clean person, say like Barack Hussein Obama, stay out of trouble, don't tatt and pierce your body, get some education and training, learn to speak proper English(!), become a productive and valuable member of the society that has been created, save up some money, and purchase a home with a decent down payment so you won't be ripped off by he financial institution. Or, by your own choice, stay lazy, stupid, and unmotivated and you will remain in your ghetto for your entire life. I hope I haven't been too harsh!?!

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5Silence_Dogood(1341 comments)posted 1 year, 3 months ago

Study: Blacks in Mahoning County commit more murders.

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6Silence_Dogood(1341 comments)posted 1 year, 3 months ago

Study: Blacks in Mahoning County fail the Ohio Graduation test at a higher rate then Whites.

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7Silence_Dogood(1341 comments)posted 1 year, 3 months ago

Study: Blacks in Mahoning County are less likely to have full time work.

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8Silence_Dogood(1341 comments)posted 1 year, 3 months ago

Study: Blacks in Mahoning County are more likely to have children out of wedlock.

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9Silence_Dogood(1341 comments)posted 1 year, 3 months ago

Study: Blacks in Mahoning County are more likely to have a lower income.

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10Silence_Dogood(1341 comments)posted 1 year, 3 months ago

The headlines could go on and on but I think the point is made that the Banks have a good reason why the numbers are what they are.

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11DwightK(1256 comments)posted 1 year, 3 months ago

Is it so hard to believe that people make really bad financial decisions in a city where the high school graduation rate is so low?

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12123goz(580 comments)posted 1 year, 3 months ago

Black or white, if the interest rate was not doubled on the 'risky' loans, they (the lender) would stand a better chance of getting the loan paid back, and there would be more equity in the property if it was repo'd at some time. Paying for 5 years to find out you have not made a dent in the principle would be more reason to walk away in disgust.
The lender just wants to collect the interest and get the base money back, don't care if the people stay in the house, which would help everybody.

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13TERRAPINST(302 comments)posted 1 year, 3 months ago

Let me get this straight? So African/Americans ( I though "black" was politically incorrect this week) Receive more or TAKE more? Am I confused are these individuals not given the choice as to whether they should take the loan AAAAAAAAAAAnd if they possess poor credit histories which is what these issues are based upon should they TAKE out loans when unable to repay which is spelled out clearly in black and white. Didn't the American economy just endure horrors based upon the housing market failure which was in part due to people taking out loans they couldn't repay and being offered loans when normally not eligible? There is a problem on both sides here, but when it comes down to it If I can't afford and don't repay my loans I face trouble and I am Caucasian is there something I am missing!!!???? Truly GEEEEEZZZZZ.....

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14JS(648 comments)posted 1 year, 2 months ago

More grant money is desperately needed in Mahoning County.

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15Sparky(185 comments)posted 1 year, 2 months ago

123. The interest rate is irrelevant here because banks must lend in all areas or be accused of redlining. Each bank has CRA (Community Reinvestment Act) standards they must abide by in order to operate in all markets and neighborhoods. Therefore, they are permitted to charge applicable rates based on risks and the higher the risk the higher the rate. Bottom line though is most of these mortgages end up in foreclosure which costs the banks. They in turn pass that loss on to the solid bill paying customers. Sad but true.

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16city_dweller(194 comments)posted 1 year, 2 months ago

Why is everyone assuming that the black victims of this system deserved what they got? Do you really believe all black residents of Mahoning County are poor, uneducated, and irresponsible? Look around you and not just at the worst headlines in the newspapers and the worst neighborhoods in the city. There is a thriving black middle and working class in this area, including YSU professors, nurses, bus drivers, teachers, clergy, police officers, industrial workers, and dozens of other professionals. And guess what, when they go to buy houses, they are more likely to be denied a loan than a white person with the same financial history, and if they are offered a loan, it is more likely to be predatory in nature. Sorry, but that's a proven fact, which is why this article can safely make both statements.

Look at the comments above. If any of these people were in charge of approving loans, what chance would a black person have of getting one from someone who thinks "successful blacks never complain" -- even though Kenneth Simon is very successful yet speaks out in this very article against discrimination? And I'm sure someone who believes black homeowners "will turn around and treat [the house] like a pig sty" and "stay lazy, stupid, and unmotivated and you will remain in your ghetto for your entire life" would be perfectly capable of making an honest, fair, non-prejudicial decision about the black applicant sitting before him/her. Right. And if silence_dogood were in charge of loans, no black person would ever get one because "obviously" the risk is just too great. Don't measure the individual -- just make sweeping generalizations and apply them to a whole race. Oh wait, that's what we already do, which is why this article exists in the first place. Oh, the irony!

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17northsidelady85(2 comments)posted 1 year, 2 months ago

As a "black" person living in Mahoning County I'm sick of what I call the "black" excuse. Having graduated from Youngstown City schools within the last 10 years I feel that I was afforded the same opportunities education-wise as "white" students. Life is about choices and taking responsibility for those choices. I refuse to use my race as a crutch or an excuse not to make a better life for myself. I'm personally tired of hearing it. When I choose to buy a home I already know my race will not be factored into it. Anyone who thinks that race is factored into a loan decision is delusional and probably shouldn't be purchasing a home anyway.

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18brntbarbour(18 comments)posted 1 year, 2 months ago

@Northsidelady, Your comments show your youth and naiveté; racism is alive and well, especially in the lending market. Look at all the racists and insensitive comments posted in response to this article and ask yourself, if one of those insensitive folks were the bank officer, would you get the loan. Of course you would not, and if you did, it would be earmarked for an area that those folks want you to move into or stay in as you present no threat as long as you are in the ghetto. Also, when black people do complain, not all of us are using our race as a crutch to obtain that which we aren't entitled too, but rather, we are seeking an even playing field. The only people complaining about us claiming discrimination are those who are discriminating against us or fearful we are moving in next door. If you keep living, you are going to be discriminated against, no matter what level of education you attain.

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19Sparky(185 comments)posted 1 year, 2 months ago

Northsidelady85. Thank you for your honest perspective on this topic.

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20walter_sobchak(1909 comments)posted 1 year, 2 months ago

Just because my comments are righteously insensitive does not make them racist. If the article is about the disparity in loans between blacks and whites, it is impossible for a white person not to be called a racist. But, the truth does hurt, as Comments #5 thru #10 indicate. I was told years ago by an old-timer that the most important thing you can do in the US is to master the English language; reading, writing and especially speaking. To not do this will doom the person to living their life in whatever ghetto they need to be in to exist. Northsidelady85 gets it. She will take responsibility for her life and will succeed, not becoming part of the problem.

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21brntbarbour(18 comments)posted 1 year, 2 months ago

@Sparky, predatory lending and redlining both start with the Feds who control parameters set out in FHA, VA, and USDA housing loans. If you look at the requirements of these programs, one can obtain a loan only in certain areas, cities and towns, and only under a clearly defined set of requirements. Low income- no problem, the loan will be for an area less desirable, clearly set out in the program, where others who are similarly situated reside. In other words, move where they allow you too, or find another lender. Private institutions are bound to follow these rules when lending under one of these programs orchestrated by the gov't. While Northsidelady's comments may be honest, they are an insult to all the civil rights leaders who fought and continue to fight against institutionalized forms of racism, both overt and covert. The fact that you cannot see it, doesn't mean it doesn't exist. Of course, if you have never attempted to purchase a house, signed a valid contract for the house, and then had it sold to another buyer based on skin color-not qualifications, then perhaps you wouldn't understand.

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22Lifes2Short(3877 comments)posted 1 year, 2 months ago

city dweller, brntbar,

Excuses, nothing but excuses. That is exactly what Northsidelady is saying. Quit with the da@# excuses. And you notice that when a black speaks the truth, aka Northsidelady, they put her down, aka brntbar, and try to brainwash her with the racism, racist, discrimination BS that is way to rampant in society today. You complain about a black and such your considered a racist. But it's all OK for the blacks to blame the whites for there sorry excuses time after time, year after year, etc.
Quit with the damn excuses and maybe, just maybe, you'll succeed in life and not blame everyone and everything. Give it a try, there are alot of successful blacks that went that path and are living happily. Funny thing they weren't discriminated against or they don't throw around the racist card. Amazing, huh?

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23Sparky(185 comments)posted 1 year, 2 months ago

Brntbarbour. You're wrong. You can move anywhere you want as long as you can afford it. The issue here is affordability. Regardless of color, ethnicity, and religion, if you can not afford to live somewhere then you won't. I have owned and sold 3 houses in my life so contrary to your opinion I do know what it's like to enter into a valid contract. Additionally, our civil rights leaders should be proud when Northsidelady85 speaks honestly about not using the "black excuse" (her words) because that's what our civil rights leaders wanted. They wanted equal rights based on the merits of the person and the removal of race as a factor. Northsidelady85 gets it. Others don't.

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24northsidelady85(2 comments)posted 1 year, 2 months ago

bnrtbarbour I've lived on the east and north sides of Youngstown. Just because I am from the ghetto doesn't mean I would stay there. I live in an apartment complex that did require a credit/employment, and background check. They also required that I made 3x the amount of monthly rent payment. What the above posted stated did not offend me. None of those shoes fit at all, so I didn't feel need to wear them. I'm sorry that you have felt that you were discriminated against, but I have yet to experience it.

Secondly I do not own a home. Owning a home at this stage in my life is not desirable. I refuse to sign into a 15-30 year agreement until I've reached other goals in my life. Although I have had two auto loans, which I have paid off. I've entered into valid contracts before I know how to read an interest rate. I know I shouldn't sign anything that I don't completely understand either. Even though my skin is black, I've never identified myself as black. I've identified myself as an American who is a sum of her credit/employment/criminal history.

Lastly, I feel I am living the dream that Martin Luther King Jr. stated. I've embraced what those men and women did for me during the civil rights movement and gone beyond. If you are talking about civil rights like Jesse Jackson or Al Sharpton then yes I'm probably insulting them, because I don't want men like them representing me. We can agree to disagree, but my race has never ever held me back.

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25Silence_Dogood(1341 comments)posted 1 year, 2 months ago

citydweller you are not to bright are you. When you make a statement like " And if silence_dogood were in charge of loans, no black person would ever get one because "obviously" the risk is just too great". What you failed to understand is that it all comes down to statistics, if a greater percent of a given population is in a higher risk group then it would stand to reason that that group will not qualify for the lowest rates. Read that as "Blacks in Mahoning County receive more predatory loans". It is not racist to point out the underlying reasons behind these findings. The banker could care less what color your skin is ,the only color he cares about is the color green. Every banker has to take a risk assessment with each and every person. Now if you have a group that is prone to poverty it would stand that the numbers for that group would reflect a higher incident of higher interest rates. The individual is being judged on their own merits , good or bad risk. it is not an unknown quantity or fact that the Black population in the Mahoning County (mostly in Youngstown) has a higher poverty rate then their White or Asian counterpart. With that said, it is not an indicator of some nefarious racism, but a reflection of the condition of the local Black population's economic plight. And that condition can not be blamed on the Banker, or society for that matter, but to the individual. For we all reap what we sow. Society is not going to reward somebody unless THEY put out the effort.

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26Silence_Dogood(1341 comments)posted 1 year, 2 months ago

citydweller you stated,

"And guess what, when they go to buy houses, they are more likely to be denied a loan than a white person with the same financial history,"

You need to contact these people, because each and every one of them would qualify for a multimillion dollar settlement, every courtroom in America would be more then happy to force a Bank to hand over their money to these individuals. After all statistics are EASY to prove in a Courtroom. So show us the proof. Show us the statistics.

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27brntbarbour(18 comments)posted 1 year, 2 months ago

@Northsidelady, just keep living, you will experience racism if you haven't already. And those men like Jesse and Al that you purport not to want representing you, emboldened Martin to do what he did. Jesse marched with Martin, while Al started the National Action Network which continues to this day to take up causes for those without voices. These men have dedicated their lives to helping you get where you are, even if you refuse to recognize their contributions or dislike them on a personal level.

@Sparky, the issue is not about affordability; it is about predatory lending which by its very nature is designed to keep people paying interest a lot longer than they should be when they should be making payments on principle. Predatory lending keeps people in poverty because they never "own" anything. Your refusal to accept the facts is down right ignorant.

@Lifes2short, its not about making excuses. I hold a doctorate degree and realize that God is in control of my destiny, and I make choices that affect that destiny. The article is talking about man made obstacles to the success of a people.Predatory lending is one such vehicle designed to keep people in poverty! Those with power are always trying to figure out a way to hold onto it, fearful someone is trying to take it away. Predatory lending is used to effect the goal of keeping a few in power, while holding down certain segments of the population.

Even if you aren't buying what I am selling, ask yourself- How many black owned banks or black loans officers exist in Youngstown, or the country for that matter?

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28Sparky(185 comments)posted 1 year, 2 months ago

Brntbarbour. You're pitiful

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29brntbarbour(18 comments)posted 1 year, 2 months ago

Sparky, resorts to such comments by you, not based on any rational line of argument are just what I expected. How can you even begin to defend someone who thinks racism does not exist because they haven't experienced it (yet)? The struggle continues, even if you fail to recognize it!

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30Sparky(185 comments)posted 1 year, 2 months ago

Brnbarbour. Your assumption of the race of each blogger is rather prejudicial.

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31brntbarbour(18 comments)posted 1 year, 2 months ago

I am not assuming the race of anyone; most of the people on here have made it perfectly clear already! And once again, you keep straying from the real issues and the point of the article. Debate, don't hate!

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32Sparky(185 comments)posted 1 year, 2 months ago

Debate? You stopped debating at post 18 when you hammered nothsidelady for her honest post. Real issue here, with you at least, is that you lead with the race card and expect all others to agree or sympthize with you. If they don't then in you're eyes they're.....(wait for it)......racist!!!! It doesn't look good on you. Stop it already. Time for me to move on to another blog. You're ranting is exhausting

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33JoeFromHubbard(1038 comments)posted 1 year, 2 months ago

"Racism" always has been and will continue to be a fact of life.

It is not restricted to a black and white issue although one may perceive it as such in this area.

Get over it.

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342ndamendment(20 comments)posted 1 year, 2 months ago

Really, Isn't it easier to get a loan for a 5K house than a 150K house. The housing in Youngstown is so low that the Institutes that gives the loans can afford to take a hit if they don't pay lol. Anyone that gets a loan for 5k to buy a house in Y-town shouldn't need a loan in the first place. lol a 30 year loan on 5K would be hilarious.

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35zz3(931 comments)posted 1 year, 2 months ago

Its just another loan they already know they're not paying back anyway! We get it so quit trying to candy coat it we'll be paying for these idiots in OUR (meaning working and surviving on your own) taxes until we drop!!! Entitlements soon will bring us the rest of the way to our knees. We just can't support everyone who just thinks its to hard to work like hell and save. Don't burden yourself with children until your ready. And your right its not a black and white issue but the blacks want it to be! It's their only out, greatly worn out but like I said they are still hanging on the slavery thing until they drop. Which as someone else above said is the reason they are less successful like it or not. If it were easy we'd all be rich but its not wake up. If you cant afford it don't buy it like the rest of us in normal land

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36ytowner007(3 comments)posted 1 year, 2 months ago

God bless those who thrive to be contributing members of society. To hell with those who live off others (unless they truly require it). I pray more blacks attain the attitude of northsidelady. I respect her and appreciate the hill she has climbed.

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37twentyonetwelve(98 comments)posted 1 year, 2 months ago

Read before you sign.

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