8 banks duck Council hearing on equitable mortgage practices
At the time they applied for a home loan, Joe Bozeman and his wife, Rayne, were self-described “Ph.D.s with reliable jobs.” He was an energy and environmental engineer. She was a professor at Chicago State University.
They applied for and were confident they could handle a loan of between $400,000 and $500,000. But they were wrong. Three banking institutions told them so.
On Friday, the Bozemans told their story to a City Council committee during a hearing about equitable mortgage lending.
Their banking odyssey took them from Chase Bank to Wintrust Bank to Rocket Mortgage — with different denial explanations at every stop. All three institutions established down payment or ever-changing closing cost fee hurdles they couldn’t meet.
That’s why the Bozemans now rent an apartment in Pilsen for “about the same monthly costs” they would have spent if they had gotten the loan they needed to become homeowners.
“We love Chicago and wanted to establish roots here. However, the systems required to buy a home seemed unwilling to invest back,” Joe Bozeman said.
Rayne Bozeman said the 20% down payment demanded by one of the three banks is “not feasible for folks who don’t come to the table with generational wealth.”
“We need this committee to fully grasp that two qualified Ph.D.s with reliable jobs could not buy a house in the city of Chicago, despite being fully invested in our communities,” she said.
Rayne Bozeman said her background is in psychology. She studies racism and prejudice. She can’t help but think about the couple’s banking odyssey “through that lens.”
“The worst part of the process was feeling like we were being taken advantage of. … The process seemed like it was shrouded in mystery or that we were being intentionally misled,” Rayne Bozeman said.
“What we learned from this experience is that buyers like us — who don’t have the same economic and social safety nets that maybe some of our wealthier counterparts have — require additional support to be successful in this home-buying process and to not be excluded from this part of the American dream.”
Earlier this week, the Finance Committee
put off a vote that would have designated 13 banks as municipal depositories to turn up the heat on banks to start lending to Black and Hispanic Chicagoans and businesses, invest in South Side and West Side neighborhoods, and get them to attend the subject matter hearing Friday about their lending practices.
It didn’t work.
Housing Committee Chairman Harry Osterman (48th) said eight banks declined invitations to attend the hearing: Associated Bank; Bank of America; Citi Bank; Fifth Third Bank; PNC Bank; U.S. Bank; Wells Fargo; and Wintrust. J.P. Morgan did not respond, the chairman said.
When Guaranteed Rate stepped up as the only participating lender, “We decided to hold today’s hearing without representatives from lenders,” Osterman said.
Housing Commissioner Marisa Novara pointed to a recent study by WBEZ Radio that showed that banks lend 12 cents in Black neighborhoods and 13 cents in Hispanic neighborhoods for every $1 they lend in white neighborhoods.
Novara said her “concern” is that study was followed by “lots of announcements of more money for South and West Side” communities.
“Don’t get me wrong: More investment in South and West side communities is clearly needed. But what’s also clearly needed is the painstaking, non-headline-grabbing, internal bank work of examining how your systems and structure are perpetuating racist outcomes and then solving for them repeatedly,” Novara said.
“That’s what we really want and need to see. And that’s what our city deserves.”