Fake News Chatter

The chatter around this comment.....'you can buy a home in America, but statistics show that a black dude is three-times more likely to be denied a home loan than a white white dude.....yet both have the same exact credit score.'

I heard this comment here today, and pondered upon it.  Forbes magazine has covered this, and a few other news folks over the past five years talk about this.

There are several problems with the commentary, the news focus, and the data.

First, they always want to talk about in the national sense.....NEVER state-by-state. 

In California, the average basic house (in the central region of the state) is $350k, and that only gets you to a starter home.  You'd need $500k to really have a decent place. 

If you were marginally only making $40k a year in California....no one would talk to you unless you walked up with $100k minimum in your hand for the down-payment.  It wouldn't matter on your skin color.....in that state, you are screwed.

Second, walking into a bank in Florida....showing them your score and admitting your yearly income is only $48,000 a year (as a teacher).....then hyping your idea of buying a $400k home, with only $30k in a down-payment?  The bank will laugh and say....downsize this to a $200k house or we will refuse your loan request.

Third and final, if you walk in and display your debt...admitting that you still owe $35k on college debt (at age 30), have $50k in credit card debt, and still owe $9k on your car loan....then trying to get them to approve a stupid $150k loan for a condo, but almost no down-payment money?  What idiot bank would sign up for that deal?

Banks basically want business....they are begging for people to come in and sign up for a 20-year loan.  But reality falls into play.....they need to see minimal debt and a decent history.  The news people fail to grasp this part of the discussion.