This Fight is Our Fight: The Battle to Save Working People. Elizabeth Warren
that he would lose his house were high from the day he signed the mortgage refinancing papers—high, but well hidden in the fine print. Michael had been sold a mortgage that was like a grenade with the pin already pulled out.
As he slid toward foreclosure, Michael suspected that he’d been targeted because he was black. “I really did,” he told me. “When they found out who I was, especially when it came time to redoing the loan …” His voice trailed off.
For Michael, confirmation came later, when he was struggling to hang on to his home. It was at the height of the financial crisis, and he had gone to the Chicago convention center for an event for people in trouble with their home mortgages. He described the scene: thousands of people were lined up, all facing foreclosures and all hoping to find a way to save their homes. He was there for thirteen hours, and as he waited his turn for advice, he looked around. “Thousands of African Americans were there at that time,” he recalled. “The place was just filled with African Americans and Hispanics. That told me who was targeted.”
Latinos were crushed by the housing crash as well. In the wake of the Great Recession of 2008, nearly one in three Hispanic households had zero or negative net worth. Over the period from 2005 to 2009, Hispanic household wealth dropped 66 percent. Research showed, as the Washington Post reported, that “blacks and Latinos were more than 70 percent more likely to lose their homes to foreclosure during that period.”
Years after the financial crash, signs of housing discrimination persist. After analyzing its extensive 2013 data, Zillow reported that compared to whites, African Americans and Latinos are more than twice as likely to be turned down for a mortgage. Government data from 2015 also shows that the hurdles for homeownership are higher for both blacks and Latinos.
Discrimination in the rental market is also widely documented. In 2016, a Connecticut real estate firm paid thousands of dollars to settle allegations that it had discriminated against minority applicants for apartments, including offering a white applicant an apartment tour while denying a tour to an African American applicant. Also in 2016, the Department of Housing and Urban Development settled with a California apartment complex that discriminated against Mexican applicants by refusing their forms of identification while accepting a Canadian’s ID. And this sort of discrimination has been going on for a long time: favoring white renters while turning away black renters, for instance, is pretty much what was happening in some of President Trump’s apartment buildings back in the 1960s and 1970s—and which ultimately resulted in a settlement with the Department of Justice.
The housing collapse wiped out trillions of dollars in family wealth nationwide, but the crash hit African Americans and Latinos like a tidal wave. And the hit was doubly hard because these were the families that, generation after generation, had already been aggressively discriminated against in housing. Restrictive deeds, land sales contracts, redlining—American history is littered with examples of housing laws and lending strategies that were designed to deny black and Hispanic families mortgages and that prevented them from building housing wealth.
For most middle-class families in America, purchasing a home is the best way to build financial security. A home isn’t just a place to live; it’s also a retirement plan: pay off the house and live on Social Security. A home provides financial credibility and reassures a banker that someone is a good risk to start a business. A home provides a way to help the kids make it through college and a safety net if someone gets really sick. And, if all goes well and the grandparents can stay in their home until they die, a home can give the next generation a boost. Selling that home can provide a family with the money needed to move up the ladder, which, in turn, means that the grandchildren will have better chances in life.
That was the big and brilliant idea. Start with homeownership, build a little more security, and then build a little more and a little more. Diversify into retirement savings, maybe get a better job or start a business, help the kids, and then the grandkids—and keep the ball rolling forward. And it worked that way, one generation after another, for much of the twentieth century, at least for white Americans. But for black and Latino Americans, it was like swimming with rocks in your pocket: possible, but a lot harder.
Housing discrimination isn’t the only way systemic racism pulls black and Latino families down. Discrimination has been thoroughly documented in criminal justice, in employment, in education, in auto lending, in access to bankruptcy relief, and in health care—even in access to stores that sell fresh produce. The cumulative impact of decade after decade of discrimination becomes painfully obvious in just a handful of economic snapshots:
Among those who work full-time, African Americans earn 59 cents and Latinos earn 70 cents for every dollar earned by whites.
For each dollar a college degree adds to the income of a black or Latino graduate, the same degree adds about $11 to $13 for whites.
Compared to whites, African Americans are 80 percent more likely to be unemployed; for Latinos, that figure is 37 percent.
Compared to white families, black families are 68 percent more likely, and Latino families twice as likely, to have nothing in retirement savings.
The financial crash pounded all families, regardless of race. The devastation wasn’t, however, evenly spread out. Everyone—blacks, Latinos, whites—got cheated on mortgages, but a much higher proportion of blacks and Latinos got cheated. And when they got cheated, everyone—blacks, Latinos, whites—often got wiped out, but a higher proportion of blacks and Latinos had nothing else to fall back on. Blacks and Latinos had lower incomes and less in savings, and they got less help from other family members. The lesson is clear: economic racism makes every other problem worse.
Michael will never get over the 2008 crash. The memory of the day he and his family packed up and moved out will be with him forever. Whatever else happens in his life, he will always recall shoveling the snow and mowing the lawn and checking on the robins long after the bank had taken away his home.
A handful of Wall Street insiders boosted their companies’ short-term profits and pumped up their own fat bonuses by selling financial grenades with the pins pulled out, and millions of people like Michael ended up with their lives blown apart. I know life isn’t fair, but how did our country get to the point where this much unfairness became business as usual? Surely we are a better people than that.
YOUNG DREAMS
In the spring of 1966, when I was sixteen, I started going home every day for lunch. The house was empty, because Mother was working at Sears and Daddy was out selling fences. But I wasn’t there for company; I just wanted to check the mail.
I had found two prospective colleges, one by searching through a book in the high school counselor’s office and one through a boy I knew; both schools bragged about their debate scholarships. I was a good debater—on my way to the state championship—and I figured that was my chance. So I’d taken the cash from babysitting and waitressing and bought two money orders