Bloomberg reports Bank of America is trying out no down payment mortgages for minority borrowers.
Bank of America Corp. started a trial program aimed at helping first-time homebuyers in Black and Hispanic neighborhoods by offering mortgages that don’t require down payments, closing costs or minimum credit scores, all considered longtime obstacles to narrowing the gap between White and minority ownership.Customers using the program will be evaluated for a home loan not by credit scores, but rather factors such as their history of making rent, utility, phone and auto-insurance payments on time, BofA said in a statement Tuesday. The program will be tried out in certain predominately Black and Hispanic areas of Dallas, Detroit, Los Angeles, Miami and Charlotte, North Carolina.
Limiting the program to "predominately Black and Hispanic areas" will sound like perpetuating housing segregation to those with a racial chip on their shoulders. No good deed goes unpunished.
The last time this sort of thing was tried we got the Great Recession of 2008, and many, many minority home purchasers lost their homes. Lots of other people were harmed as well, and it took the economy years to climb back out of the hole that giving mortgages to unqualified borrowers caused.
