But here's the truly mind-blowing news. The FHA has set a minimum FICO (credit) score of 580 for those seeking to get FHA-backed loans with as little as 3.5% down. Some banks, however, are requiring higher scores to avoid another wave of defaults. Guess what?
Yep, according to CNBC financial journalist John Carney, the National Community Reinvestment Coalition is charging that:
the higher FICO requirements disproportionately discriminate against African-American and Latino borrowers, many of whom have credit scores above the 580 threshold set by FHA but below the higher minimums set by banks.
In other words, no one is deliberately discriminating based on skin color. It's just that those with lower scores are disproportionately minority, and from that, the NCRC assumes racism.
This entire debate is reminiscent of the fact that the mortgage debacle stems in significant part from the low lending standards forced on banks as a result of the Community Reinvestment Act -- in a sop to the politically correct.
Sure, there's blame to go around for the mortgage meltdown, but it seems unfair to accuse banks of racism when those who run them are simply trying to be responsible (having hopefully learned their lesson after the last few ugly years).
The next time your friendly lefties want to blame the entire mortgage meltdown on greedy bankers, keep this story in mind. We've already paid plenty in the cause of political correctness.