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With so many highway movies doing the rounds, sojourning from city to city and state to state feels like a romantic prelude to a long <keyword id="6374782" type="UNKNOWN" weightage="100" keywordseo="journey">journey</keyword> of self-discovery – till reality strikes. And just like a movie, the reality can be multilayered – varying from bad roads to gasping traffic and minimal road safety. But we promised you relief from those travelling conditions the next time we return with our <keyword id="2053047" type="UNKNOWN" weightage="100" keywordseo="Open-roads">Open Roads</keyword> series. And here we are, with more information about a whole new bunch of <keyword id="2074695" type="UNKNOWN" weightage="100" keywordseo="Intracity-and-inter-city-expressways">intracity and inter-city expressways</keyword> that not only reduce <keyword id="4251245" type="UNKNOWN" weightage="100" keywordseo="Commute-time">commute time</keyword> but also reshape a country’s landscape, <keyword id="34412" type="ORGANIZATION" weightage="80" keywordseo="economy">economy</keyword> and way of life. In the last slideshow of this series, the journey begins from the <keyword id="44875" type="UNKNOWN" weightage="100" keywordseo="West-coast">west coast</keyword> and goes down south. 
 As we have mentioned before, expressways are limited-access roads designed for high-speed traffic. The economic impact of an <keyword id="2074705" type="UNKNOWN" weightage="100" keywordseo="Expressway-network">expressway network</keyword> criss-crossing the country is all too obvious and the <keyword id="6404450" type="ORGANIZATION" weightage="100" keywordseo="Ministry-of-Road-Transport-and-Highways">Ministry of Road Transport and Highways</keyword> (MoRTH) has already recommended a total <keyword id="2074707" type="UNKNOWN" weightage="100" keywordseo="E-way-network">e-way network</keyword> of about 18,637 km in the country. Development work is being done in three phases and is scheduled to be completed by 2022. During the Interim Budget, <keyword id="6355261" type="POSITION" weightage="60" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="43940" type="PERSON" weightage="60" keywordseo="P-Chidambaram">P Chidambaram</keyword> also told the Parliament the road network in the country witnessed over sevenfold increase at 3.89 lakh km over the past decade. 
 Does that mean we may soon see an <keyword id="2074709" type="UNKNOWN" weightage="100" keywordseo="E-way-ecosystem">e-way ecosystem</keyword> similar to the interstate system in the US? Given the obstacles in terms of <keyword id="6364579" type="UNKNOWN" weightage="100" keywordseo="Land-acquisition">land acquisition</keyword>, <keyword id="414903" type="UNKNOWN" weightage="100" keywordseo="fund-crunch">fund crunch</keyword> and <keyword id="2074714" type="UNKNOWN" weightage="100" keywordseo="Slow-implementation">slow implementation</keyword>, it’s definitely going to take some time. Meanwhile, hop into the driver’s seat and go off exploring some super-fast roads you have not travelled yet. After all, it’s a journey with no end… and wheels will always need roads. 
 
Image: Thinkstock Photos/Getty Images

Be It Intracity Or
Inter-city, These 5 Expressways Make Travelling A Breeze

<ul class="summary-list"><li>Black borrowers are 80% more likely to be denied a mortgage than white borrowers.</li><li>The Fair Lending for All Act would establish a new federal office to ensure discrimination in lending is not happening.</li><li>The bill would help end discriminatory practices by clarifying that discrimination based on zip code or census tract is prohibited under ECOA.</li><li>This is an <keyword id="6356002" type="UNKNOWN" weightage="100" keywordseo="opinion">opinion</keyword> column. The thoughts expressed are those of the author.</li></ul>In 2020, Black borrowers <a href="https://www.cnbc.com/2020/08/19/lenders-deny-mortgages-for-blacks-at-a-rate-80percent-higher-than-whites.html">were 80% more likely to be denied a mortgage</a> than white borrowers. While this statistic is jarring, it is hardly surprising to those of us familiar with the US mortgage industry. A holistic look at America’s <keyword id="35061" type="ORGANIZATION" weightage="60" keywordseo="housing">housing</keyword> market shows that it disadvantages people of color in some startling and systemic ways that are not always obvious at the loan level. The <a href="https://www.congress.gov/bill/117th-congress/house-bill/166/text">Fair Lending for All Act</a> aims to change that. Introduced by Congressman Al Green, a Democrat from Texas, the bill clarifies the language of the Equal <keyword id="6354680" type="UNKNOWN" weightage="60" keywordseo="credit">Credit</keyword> Opportunity Act (ECOA) to better address systemic discrimination in mortgage lending. At the same time, it establishes a new bureau within the Consumer Financial Protection Bureau (CFPB) to test whether lenders are following federal guidelines as set out in the Home Mortgage Disclosure Act (HMDA) and ECOA. While seemingly obscure and legalistic, the Fair Lending for All Act will go a long way to making mortgage lending fairer and ending racial disparities in home ownership.<h2>Disparate impact </h2>Historically, Black homeowners have had to contend with systemic <keyword id="44060" type="PERSON" weightage="60" keywordseo="Racism">racism</keyword> in the mortgage industry, contributing to lower levels and slower growth in homeownership among Black Americans. Through redlining - a process in which <keyword id="6354553" type="COMPANY" weightage="60" keywordseo="real-estate">real estate</keyword> agents and mortgage lenders steer Black renters and buyers into specific communities, contributing to de facto segregation - “agencies deemed Black communities too risky for federal home loan assistance, regardless of the income, wealth, or education of the inhabitants, or the quality or location of its housing stack,” Jim Carr, a former senior vice president of the Fannie Mae foundation, <a href="https://www.usatoday.com/in-depth/opinion/2021/05/30/homeownership-black-america-reparations-tulsa/5190986001/">wrote last month</a>. According to Carr, this drastically slowed the rate of homeownership among Black Americans. The Black homeownership rate has increased only 4% over the past five decades. Meanwhile, the gap in homeownership between white and Black Americans was 5% lower in 1920 than it was in 2020. This problem is then compounded by further economic inequalities Black Americans face. A recent study from the McKinsey Global Institute <a href="https://docs.google.com/document/u/0/d/1RgWYZQ2yzgrhzFMSnO3V5Q-jJwpoDRhVAkRraTcIbjo/edit">found that</a> Black Americans make on average 30% less than white Americans. A <a href="https://www.insidehighered.com/news/2021/02/23/some-say-debt-forgiveness-would-lessen-racial-wealth-gap-others-say-it-would-make-it">disproportionate number of Black Americans have student loan debt</a>, representing 13.4% of the population but nearly a quarter of all student loan debt incurred in 2019. Black borrowers also <a href="https://www.americanprogress.org/issues/economy/reports/2021/03/19/497377/eliminating-black-white-wealth-gap-generational-challenge/">inherit less and receive fewer financial gifts</a> from family members than do white Americans. Debt-to-income and loan-to-value ratios <a href="https://www.housingwire.com/articles/hmda-data-presents-sobering-picture-of-black-homeownership-in-2019/">have been higher</a> for Black and Latino Americans. <a href="https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm#:~:text=In%20the%202019%20survey%2C%20White,less%20wealth%20than%20White%20families.">Data from the Federal Reserve</a> shows that the median Black family has less than 15% the wealth of the median white family. What this means in practical terms is that Black and Latino borrowers have a higher amount of debt relative to their income. They, in turn, must borrow more on their homes, having less of a down payment to put towards the purchase. Many lenders and underwriters will argue that there is no inherent racism here. If you qualify, you qualify, and if you don’t, you don’t. But in my own experience in the mortgage industry over the past decade, this kind of discrimination is not always apparent, even to the folks being discriminated against. There are three types of discrimination which ECOA forbids: overt discrimination, comparative discrimination, and disparate impact. Overt discrimination is when a lender blatantly treats an applicant differently based on a protected characteristic, such as race or sex. Comparative discrimination results from “differences in treatment that are not fully explained by legitimate nondiscriminatory factors,” <a href="https://www.federalreserve.gov/boarddocs/supmanual/cch/fair_lend_over.pdf">according to the Federal Reserve</a>. The last type of discrimination, disparate impact, “occurs when a lender applies a racially (or otherwise) neutral policy or practice equally to all credit applicants but the policy or practice disproportionately excludes or burdens certain persons on a prohibited basis.”If someone says “we don’t lend to Black people” or “unmarried women are charged a hire origination fee,” that’s overt discrimination. Other types of discrimination are not always so apparent. Some financial institutions may have policies <a href="https://www.jdsupra.com/legalnews/back-to-basics-continued-equal-credit-2716400/">which take into consideration a borrower’s census tract or zip code</a>, which, due to racist practices like redlining, can have a discriminatory effect. This is one of the practices the Fair Lending for All Act hopes to curtail, making it clear that <a href="https://www.jdsupra.com/legalnews/back-to-basics-continued-equal-credit-2716400/">it is unlawful to discriminate based on census tract or zip code</a>. This clarification is welcome, as it will help loan officers and underwriters better understand the law. It will also require lenders to assess and even change policies which are currently leading to discrimination within the mortgage industry, whether unintentional or not. In doing so, it will make lending fairer to those who have been historically locked out of equal access to credit.<h2>Giving Black homeowners a chance</h2>A lot of the discrimination currently keeping Americans of color from equally accessing credit comes from seemingly race-neutral policies that are applied evenly but have a disparate impact. Loan officers make commissions based on the loan amount, and originating a smaller loan on a less-expensive house may not be as enticing as lending on a bigger loan in a more expensive neighborhood. I certainly heard “it’s not worth the work” several times in my mortgage career, though never in relation to an applicant’s race. Still, given the income and wealth disparities previously discussed, the possibility for comparative discrimination is obvious but would only be apparent to someone looking at the totality of a loan officer’s or company’s production. As such, lenders “on the ground” may well not see that what they’re doing is discrimination, and borrowers who are covertly or comparatively discriminated against - and certainly those experiencing disparate impact - may not realize it, either. That does not mean the results are not just as pernicious. In fact, these practices are making it harder to close the racial wealth gap. Last month, I was horrified but not surprised by the story of a Black woman in Indiana who discovered <a href="https://www.indystar.com/story/money/2021/05/13/indianapolis-black-homeowner-home-appraisal-discrimination-fair-housing-center-central-indiana/4936571001/">her home value doubled when she had a white friend stand in as the homeowner</a>. Earlier this year, a study of house prices in Chicago’s Black and Latino neighborhoods showed <a href="https://www.wbez.org/stories/racial-inequality-in-how-chicago-area-homes-are-valued-is-increasing/241643ab-6cba-4646-9660-af4f26acc6d8?utm_source=Newsletter_Weekly-Non-Member&amp;utm_medium=WBEZEmail&amp;utm_campaign=News_Newsletter_Weekly-Rundown_News_20210522&amp;utm_content=5%2F22%2F2021&amp;DE=WBEZEmailamp;DE=WBEZEmail">there was a gap of $324,000 in the values of those homes between comparable properties in white neighborhoods</a>. While this may seem astronomically high, the same sociologists who looked at Chicago’s study found last year that this is a national problem, with the gap being $245,000 nationwide. This, in turn, costs minority sellers hundreds of thousands in equity, which has a considerable impact on the racial wealth gap. Minority buyers are also disadvantaged. The pandemic has exasperated gentrification, with <a href="https://www.washingtonpost.com/business/2021/06/09/home-prices-fed-economy-interest-rates/?utm_campaign=wp_post_most&amp;utm_medium=email&amp;utm_source=newsletter&amp;wpisrc=nl_most&amp;carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F33690b0%2F60c0ec059d2fdae3027672c7%2F5977697bae7e8a6816e45069%2F10%2F72%2F60c0ec059d2fdae3027672c79d2fdae3027672c7">home prices skyrocketing</a> in even once-affordable communities. Carrying higher debt-to-income ratios (thus limiting the amount they can borrow) puts them at a disadvantage in bidding wars. On the other hand, borrowers with generational wealth and less debt might be able to either put more money towards the down payment, thus decreasing the LTV, or be able to borrow more because of a lower DTI. But again, minority borrowers are disadvantaged compared to their white counterparts. <a href="https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/">A Brookings Institute study last year found</a> that “the net worth of a typical white family is nearly ten times greater than that of a Black family…” In a booming seller’s market, this disparity in wealth can leave minority borrowers unable to compete for housing. These realities make ensuring lending is fair and unbiased a top priority for the federal government and lenders alike. An agency tasked with looking at the problem from a bird’s eye view - and therefore able to get a fuller picture of the situation - is needed. For these reasons, I am so encouraged by the Fair Lending for All Act. This bill establishes within the CFPB an Office of Fair Lending Testing. Charged with ensuring these disparities disappear, the Office of Fair Lending Testing would utilize what essentially amounts to “secret shoppers” to assess whether lenders are complying with ECOA and all other applicable antidiscrimination laws. In doing so, CFPB can better assess individual loan officers’ and appraisers’ intentions, weeding out the ones who are overtly discriminating and addressing the companies which allow this. It can also correct behaviors which are leading to comparative discrimination or disparate impact, helping companies to develop best practices which ensure a fair lending process for all Americans.Ending the racial income and wealth gap is an intergenerational project, and one we must start today. The Fair Lending for All Act can help Black and Latino Americans better secure a slice of the American dream that white people have already largely had access to. Congress must not pass up this opportunity to repair a broken rung on our nation’s housing ladder.

America's housing market is racist. Congress could easily help fix it if they wanted to.

<div class="KonaFilter image-container display-table"><div><div class="image on-image"></div></div></div>The widely-followed MBA weekly mortgage application index used to be considered a leading indicator for home sales.
But in recent years mortgage applications have been flat while home sales have risen, according to Hui Shan at Goldman Sachs. 
There are three factors that explain the disconnect between the two indicators: 
<ol>
<li>"A changing relationship between mortgage applications and originations:" Not every mortgage application is approved and ends in an origination. "The pull-through rate, which is the origination to application ratio, can vary considerably over time," according to Shan. The pull through rate has risen from 2007 to 2012 because only those serious about home purchases and those that could afford it began to apply for mortgages, as opposed to the period from 2002 to 2007 when loose credit conditions drew in marginal borrowers.</li>
<li>"Shifting mortgage market landscape affects the reliability of the MBA application index:" The market share of the four large banks, Wells Fargo, Chase, Bank of America and Citi has fallen from 50% of all residential mortgages in 2011, to 31% in the first half of the year. This could skew the survey that the MBA index is based on. "In fact, the HMDA data show that purchase mortgage applications increased 10% from 2011 to 2012 whereas the MBA purchase application index only increased 3% during the same period."</li>
<li>"Cash transactions may stay elevated even as investor purchases decline:" Tight lending standards continue to cause the share of cash transactions to stay close to peak levels, even as their share in distressed sales continues to fall. "Because low-FICO homebuyers are more likely to rely on mortgages to finance home purchases, an increasing number of discouraged low-FICO borrowers contributes to elevated cash transactions."</li>
</ol>
Shan writes that for these three reasons we should also be more cautious when forecasting home sales based on changes in the mortgage applications index.

Mortgage Applications Are Going Nowhere - Here's Why That Tells Us Nothing About The Health Of Housing

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Mortgage Applications Are Going Nowhere - Here's Why That Tells Us Nothing About The Health Of Housing

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