While blacks made proportionately fewer applications for those loans, they were also rejected four times as often as whites by the two banks. But that doesn't appear to be the problem in affluent black neighborhoods. Citizens Trust Bank, a black financial institution, makes the majority of its home loans in black areas. And it has had a lower default rate on real estate loans than the city's six largest banks. The effect of racially uneven practices is devastating.
Home ownership is the main vehicle by which American families accumulate wealth.
They cannot easily get the money to improve their property, so some neighborhoods decline. That helps explain why the net worth of the typical American white family is 12 times greater than that of the average black family. If residents of affluent black areas have trouble securing real estate loans, then those in low-income neighborhoods have much more. The problem isn't hard to fix. The CEOs can reopen branches in black neighborhoods.