Banks Should Practice What They Pay For


    Executing a mortgage no longer means signing the dotted line. Nowadays, a couple co-signs maybe 25 dotted lines in a 3-inch thick sheaf of federally mandated paperwork. And usually the attending mortgage officer mutters ruefully that it’s the lawyers who’ve made it such an ordeal.

    Oh, yeah?

    Based on a recent set of tests by the Fair Housing Center of Greater Grand Rapids, it appears the lenders now may create an even deeper paper morass for themselves. The center’s tests present a remarkably ugly picture of some area mortgage officers who — either because of their own attitudes or because of undercover policies imposed upon them — place obstacles before black and Hispanic families who desire to buy homes.

    Such a practice is disgusting and worse.

    Owning a home is the hook upon which the American dream hangs. Home ownership, moreover, is widely accepted as giving Americans their uniquely personal independence and cementing Americans together as a nation.

    Now there’s no question that this town’s financial institutions have given substantial financial support to local programs that aim at racial healing. But when some of those same institutions figuratively slap the faces of minority citizens trying to finance a home, support of such programs obviously appears worse than an empty public relations gesture. Ironically, practitioners of businesses often justly damn Washington, D.C., for throwing money at problems. But the center’s findings apparently show area banks doing the same thing for the most cynical motives.

    Now, for just a paranoid moment, let’s pretend the center’s data is pure setup: that the center deliberately faked data for all the usual bureaucratic survival and budgetary reasons.

    If that were true, some area financial institutions nonetheless gave the center enough rope to make its case. The picture that emerges from the center’s findings is that some loan officers at the very least would flunk Customer Service 101 and, at worst, are sheer bigots.

    Whatever the motivation, some mortgage officers apparently were curt, indifferent, uncommunicative and unhelpful, not even deigning to hand the prospective customers a mortgage application form. Moreover, some of them allegedly used bureaucratic justifications for failing to be customer-proactive. “Sorry, but before we can disclose specifics about our interest rates or mortgage products, we must have your credit history.”

    Should a lending officer say such a thing to a customer who knows the game, his or her teeth might wind up in Peoria and he or she might be seeking work in the fast food industry. But to a family new to mortgage financing — a family, moreover, that has suffered the humiliation of racial and ethnic discrimination — such a response is an impenetrable slamming door.

    If one-fourth the banks’ mortgage officers acted half as badly as the center’s report holds, another blizzard of regulations could soon swirl onto the banks. The new regs, of course, will change nothing beyond creating more paperwork.

    What the community’s financial leaders should do is get proactive … right now. They should mandate that all their lending officers immediately attend the Centers for Healing Racism that the banks help finance. The local financial industry needs to put its people where their money is.

    Nothing would be better for minority borrowers. Nothing would be better for the banks. Nothing could be better for this entire community.

    Nothing could be worse than for the mortgage industry to defend its sorry status quo.

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