Wages of White Affirmative Action: Predatory Lending & The Ghetto

White Affirmative ActionWhite 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. Americana 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. Snapping up Spanish or Craftsman-style bungalows 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. Touring the streets wide-eyed with their travelogues some register surprise at the area’s suburban aura, the “tidiness” of the homes, the “unexpected” pride in ownership that the natives demonstrate. 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. It’s ladled out in cultural initiations like being warned to keep the car windows up when driving through Black areas or having a nifty cell phone app nicknamed “Avoid Ghetto.” Even in the era of rampant “Main Street” foreclosure and negative equity, white American democracy still means the privilege of mobility.

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 white middle class homeowners are impacted by imploding housing bubbles. Bipartisan political rhetoric that fixates on the “middle class” (as the default category), 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.

This is true, because, for the party of the Religious Right, poor people don’t work and they don’t pay taxes. 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, vestige of a primitive era when the U.S. was presumably less evolved. The moral universe consists of getting ahead through a mish mash of Darwinian manifest destiny; the way God wanted it, free of the fetters of restrictive public policy that rewards the sloth of homeowners of color.

In 2011 former mortgage giant Countrywide was found guilty of engaging in predatory lending which targeted Black and Latino homebuyers.  Last week lending titan 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.’”  During the lending boom Wells Fargo officials regularly conducted “wealth building” seminars in communities of color, (often headlined by talk show host Tavis Smiley) where reps secretly peddled subprime 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; 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.”

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. Neither GOP lawmakers, nor prominent Democrats, 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.

Being against “big government” or social welfare for working class communities of color has always been about morality. It is reflected in right wing venom against public employee unions and health care reform which are both overwhelmingly supported by people of color. It is amplified in racist discourse around illegal immigration, spearheaded by Christian fascist states in the Bible Belt and the Southwest.

sikivu hutchinson

As the white population and white births continue to decline nativist propaganda against racial, social, and gender justice has become more unabashedly Christian fascist. It’s the wages of white affirmative action that have always defined American democracy—model for the civilized world.

Sikivu Hutchinson
Black Fem Lens

Sikivu Hutchinson is the author of Moral Combat: Black Atheists, Gender Politics, and the Values Wars and the forthcoming Godless Americana: Race and Religious Rebels.

Published: Tuesday, 17 July 2012


  1. Bishop Hamilton says

    Sikivu we have got to stop asking for freedom and equal rights with out a willingness to change our behavior or step up to the plate and say enough is enough to those of us that refuse to act like they’re human..  
    What you are implying is a disgrace to those of us to whom took advantage of the opportunities presented to us and didn’t cry or blame white people or the financial system for holding us back. 

    Grant you there are somethings that still need changing, but in order for change to come we must first decide who we want too be. 
    ( And i don’t mean acting white… I mean simply acting civilized ).

    I am a African American and i’ve owned a finance business since 1979, and the way i started in the business was a white man saw me on the street and offered me a job..

    My office was in the middle of the city and better than most of the other business organizations in the same area.  
    I wasn’t dressed like i live in the hood or hanging on the street corner trying to pickup every woman that came ago !  I was / am well groomed and spoke / speak English…

    99.999% of my business didn’t come from the town i lived in as i had to travel to make my business work, not one A.A. came to do business with me but i sat and watch as they were in and out of other companies within 5 to 500 feet from my office.

    Now let me get to the heart of your statement ! 

    I remember when the interest rates was as high as 15% and A.A. & white people still purchased properties and didn’t ride around in expense cars that they couldn’t afford.

    The housing situation was bad of all nationalities and wasn’t setup to bring one group down. 
    The problem was every AMERICAN GOT GREEDY !!!!  
    And many families ( children ) have paid the price for their  parents Greed.

    But instead of saying i caused my own defeat they began blaming any and everybody they could like banks and mortgage groups..

    There are several other groups or organizations that made money off of those mortgages that should have been force to pay it back.

    Many other people used those same mortgages and still have their homes because they didn’t forget who they were !  
    They didn’t go out buying a $500,000.00 home when they knew they could only afford a $100,000.00 home nor did they buy new furniture, jewelry, clothes and new cars for every family member trying to impress others.

    One Last thing !

    Not every white person in America hates black people and Not every black person wants to live in the hood and be robbed , killed or their family members killed because we don’t cleanup our own shit.and when the police comes now it Racism because they come to do what you and every other A.A.and other nationalities should have started doing years ago.

    If we don’t start taking care of our neighborhoods !  Things are going to get very bad…

    We can’t keep moving from neighborhood to neighborhood,city to city, state to state carrying the problems with us and blaming everybody else…

    If you don’t like living in peace and harmony in the United States !  
    You should consider your own private island with no help from anybody..

  2. says

    Wow ;

    You’re very angry . I’m White and certainly never got any special help , I had a 14% Home Savings loan just like all my non White neighbors did standard life in The Ghetto , I am proud to live here . 

    I’m just another Blue Collar schmuck albeit one with a Black Lady and bi – racial children , I seriously doubt the bank cared or watched to see if I had a non White wife .

    predatory lending was and remains bad but it wasn’t only for Black Folks ~ we’re all getting screwed to-gether .

    Instead of borrowing to drive a new or near new flash car like my neighbors , I drive a 42 year old pickup truck they all laugh at and every spare $ I can scrape up , goes to principal payments .

    Maybe you should focus on that ~ my home isn’t an investment , it’s where I’ll live and die , the fact it is worth less than any amount due on it , makes no difference and I won’t abandon it .


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