Redlining Redux: Mortgage Sale to Vulture Investors Contains Majority Black Mortgages
Now, however, it is not the lending of mortgages, but the sale of mortgages that is being called discriminatory. In the afflicted neighborhoods, about 1/3 of mortgages were to given to people of color. But when the government recently sold mortgages, 61% of the mortgages were owned by people of color.
This is important because when loans are sold to private investors, the mortgages are often liquidated as quickly as possible. The investors’ primary goal is usually to foreclose. The protections that exist with federally-backed loans do not apply to mortgages after they are sold to private investors.
“This lawsuit exposes that the historic racism that has kept our communities segregated, that has blocked African-Americans from sustainable homeownership, and that increases the racial wealth gap in this country is still alive and well,” said one of the attorneys.
Original article here: Sale of Federal Mortgages to Investors Puts Greater Burden on Blacks, Suit Says