Reverse Redlining

Source: PICO National Network

Reverse redlining is a predatory lending practice that targets minorities with poor credit. Before, minorities were unable to receive loans for housing due to redlining in which banks refused to give loans due to the risk it presented in allowing minorities to own homes in white and suburban neighborhoods. With reverse redlining, minorities are able to take out mortgage loans but are subjected to high interest rates, which they were unable to pay back due to their income. They also receive less counseling and assistance to pay the loans which accounts for the loss of many homes. On the other hand, whites receive less predatory loans than minorities as they are not seen as a risk factor.

Further Reading: http://www.housingwire.com/articles/37419-groundbreaking-ruling-federal-jury-finds-emigrant-bank-liable-for-predatory-lending

Glossary, UD: Unpacking the ‘Housing Issue’

1 Comment

  1. It’s incredibly frustrating that the government is twisting its policies to STILL only benefit the white, rich Americans. In cases like reverse redlining, the government will continue to argue that they are doing all they can to make America fair and equal to all, yet will never mention the hidden policies that negate all they are claiming to be fixing. I don’t think I will ever understand the logic, or lack thereof, of the government’s policies and why they work so hard to disadvantage those who are trying to get by. I’m sure if they put as much effort into making it easier for people as they do for making it difficult, the people of this country would be in a much better place.

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