by ZeroHedge Staff at ZeroHedge
With mortgage rates about to crack 6%, the housing market rolling over, and mortgage apps collapsing as even Blackstone halts home purchases, Bank of America has found a new bagholder to keep the party going: blacks and latinos.
In a move which has sparked outrage over ‘discriminatory’ preferential treatment – BofA will be offering zero-down payment mortgages with no closing costs or minimum credit scores to first-time home buyers in Black and Hispanic neighborhoods in Dallas, Detroit, Los Angeles, Miami and Charlotte, North Carolina, Bloomberg reports.
Applicants won’t have to disclose their race, as the bank will use US Census data to determine which neighborhoods are predominately black or hispanic. The program will have no minimum or maximum loan size for the new offering, which qualifies as a FDIC “special purpose credit program.”
Those who apply for the loans will be considered based on nontraditional factors such as reliable payment of rent, utilities, cell phones and auto-insurance, the company said in a Tuesday statement.
According to AJ Barkley, head of neighborhood and community lending at BofA, the program will ditch credit scores so that “people can use other mechanisms to define their creditworthiness, buy a home and build their wealth” (for various values of ‘building wealth’, we assume)…
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