Predatory lending, ghettoes are wages of White affirmative action

White people have started to return to South Los Angeles. They can be seen watering lawns, walking dogs, and frequenting local restaurants.

Legend has it that there are a few White families that never left during the postwar mass exodus that magically transformed what was once Southwest L.A. into “South Central” – that internationally notorious, mythic den of drugs, drive-bys and destruction that launched a thousand gangsta rap careers and corporate parasites rolling to the bank on the backs of “bitches” and “hos.”

Back in the day, all of the “bad” Black and Brown schools in Compton, Watts, and Inglewood were teeming with Whites. “Leave It to Beaver” mom icon Barbara Billingsley even graduated from a local ‘hood school in the 1930s.

But these new White transplants are merely symbols of the turbulent real estate market, not inner city missionaries slumming for an ethnographic high. They’re canaries in the coalmine of negative equity.

Priced out of the ‘better’ (read White) areas of the city, some White homebuyers have been forced to venture back into the ‘hood. In savvy short sales, they’re rediscovering the “quaintness” of Black neighborhoods that their forebears escaped decades ago courtesy of government programs like the GI Bill and FHA mortgage lending.

Mobility is a birthright
But having the luxury to move back to the ‘ghetto’ they built through generations of apartheid housing policies is part of Whites’ democratic birthright. White American democracy has always meant the bliss of segregation and the willful ignorance of the bodies that get displaced.

Even in the era of rampant “Main Street” foreclosure and negative equity, White American democracy still means the privilege of mobility. White dislocation is called “a tragedy.” But when Whites move into neighborhoods that residents of color have been forced to leave due to plummeting home values and high unemployment, it’s called “gentrification.” It is only cause for national political action and reform when imploding housing bubbles impact White middle-class homeowners.

Bipartisan political rhetoric that fixates on the “middle class” while marginalizing disproportionately asset-poor working class people of color, merely reinforces a colorblind class myth where struggling White people have it “just as bad” as people of color.

‘Cultures of poverty’
God’s pecking order does not favor being on the dole and accepting handouts.

American exceptionalism is validated by the specter of the Black ghetto as den of immorality. According to this narrative, African-Americans have squandered the advantages of living in a democratic society in which everyone has an equal chance at economic mobility. Black poverty is only immoral insofar as it reflects a certain cultural indolence and pathology on the part of shiftless Blacks.

While “cultures of poverty” corrupt, cultures of success, based on capitalism, free enterprise, and hard work, uplift and moralize. Systemic discrimination has never been deemed immoral in the American mainstream. For the Right, systemic discrimination is a quaint oxymoron, a vestige of a primitive era when the U.S. was presumably less evolved.

In 2011, former mortgage giant Countrywide was found guilty of engaging in predatory lending targeting Black and Latino homebuyers. This month, Wells Fargo settled a lawsuit after it was accused of steering over 30,000 Black and Latino homebuyers to subprime loans. The class action stemmed from a Baltimore city lawsuit in which former employees alleged that Wells Fargo “loan officers referred to minority borrowers as ‘mud people’ and called subprime mortgages ‘ghetto loans.’”

So while homebuyers of color were essentially taxed for being Black or Brown, White homebuyers “bootstrapped” their way to the American dream with lower interest rates and better terms handed to them by the big banks. “Homebuying while White,” many of them had the same credit scores and incomes as applicants of color.

What they didn’t have was the same capital and asset holdings. Not only is Black and Latino wealth a fraction of White wealth, but the vast majority of it is based on home equity that has been pillaged by Wells Fargo, Countrywide, Bank of America and other lenders.  As Yuan Miu of the Washington Post argues, the housing bust has “left a scar on the finances of Black America…(it) has not only wiped out a generation of economic progress but could leave them at financial disadvantage for generations to come.”

Different assets
Yet mainstream narratives on the housing meltdown tend to revolve around irresponsible homebuyers lapping up variable mortgages they couldn’t pay off, or vulnerable homebuyers sacrificed on the altar of Wall Street’s credit default swap morass.

After President Obama finished bailing out the big Wall Street banks, his rhetoric turned to shoring up Main Street. To hear Obama tell it, the brunt of the crisis was squarely centered in Middle America. Urban neighborhoods devastated by the TKO of predatory lending, foreclosure, job discrimination, and mass incarceration barely registered on the radar of the administration or the mainstream media.

There was little mass outrage over the immoral systematic disenfranchisement of Black and Latino homebuyers by the banking crooks. No lawmakers, other than a few in the Congressional Black Caucus, rushed to criticize the lending industry’s White affirmative action. Nor did they condemn the racist practices of bankruptcy attorneys who refer debt-ridden Black consumers to more costly Chapter 13 bankruptcy filings.

It’s the wages of White affirmative action that have always defined American democracy – model for the civilized world.

Sikivu Hutchinson is the author of “Moral Combat: Black Atheists, Gender Politics, and the Values Wars.”