The Bank of America Corporation announced new zero down payment, zero closing cost mortgages – but the offer is only available for black and Hispanic communities.
On Tuesday, Bank of America rolled out a new "special purpose credit program" called the "Community Affordable Loan Solution." Bank of America said that the zero down payment, zero closing cost mortgages will only be available to first-time homebuyers in "black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami."
The press release from Bank of America did not mention that the offer was available to other minority communities, such as Asian, Native American, or Pacific Islander. The lender also did not make the offer to white communities.
"Homeownership strengthens our communities and can help individuals and families to build wealth over time," said AJ Barkley, head of neighborhood and community lending at Bank of America. “Our Community Affordable Loan Solution will help make the dream of sustained homeownership attainable for more black and Hispanic families, and it is part of our broader commitment to the communities that we serve.”
Barkley told Bloomberg that applicants don't need to disclose their race. The megabank will utilize U.S. Census data to determine which eligible neighborhoods are predominately black or Hispanic.
ESG-supporting Bank of America said, "The Community Affordable Loan Solution aims to help eligible individuals and families obtain an affordable loan to purchase a home."
The advantageous mortgage program will not use credit scores, but instead will be "based on factors such as timely rent, utility bill, phone, and auto insurance payments."
NBC News noted, "The loans require no mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price."
Bank of America stated, "Individual eligibility is based on income and home location."
Bank of America justified the enticing mortgage program by citing a report from the National Association of Realtors that found that the homeownership rate for black Americans was nearly 30% less than white Americans in 2020. The gap between white Americans and Hispanic Americans was nearly 20 percentage points.
The report also noted that Hispanic American homeownership is at an all-time high and above 50% for the first time. In addition, the report said that Asians were the racial group least likely to be rejected for mortgage loans.
According to data compiled by Bloomberg, "Approval rates for homeowners looking to lower their payments have also varied by race, with BofA approving 66% of black refinancing applicants and 78% of white ones in 2020."
There is no minimum or maximum loan size under the Community Affordable Loan Solution.
Bank of America did not specify the scope of the program.
Bank of America also announced the launch of a new "Small Business Down Payment Program." The special purpose credit program will cater to minority and women business owners in an effort to "help create generational wealth opportunities" for "historically disadvantaged small business borrowers."
The National Fair Housing Alliance defines special purpose credit programs as "a way for financial institutions to meet the special credit needs of people who have been impacted by lending discrimination, systemic racism, and redlining."
In February, the Bureau of Consumer Financial Protection (CFPB) – "an independent bureau within the Federal Reserve System" created after the Great Recession that "empowers consumers with the information they need to make financial decisions in the best interests of them and their families" – urged "lenders to explore opportunities available to them to increase credit access through special purpose credit programs (SPCPs) to better serve historically disadvantaged individuals and communities."
Brian Moynihan is the CEO of Bank of America and the chairman of the World Economic Forum’s International Business Council.
Bank of America boasts of a collaboration with the WEF "to support social and environmental progress through investment, philanthropy, and responsible business operations."
In May, Moynihan told Financial News that the transition to ESG is a “big business opportunity” for the bank.
In March, Politico noted that Moynihan had "pushed an environmental, social, and governance agenda that seems to be working for shareholders" since he was named the CEO of Bank of America.
A blog post on the Bank of America website posted in January 2021 reads: "While profits and shareholder value remain vital, stakeholder capitalism places a high value on environmental, social and governance (ESG) issues. Stakeholder capitalism repositions capitalism to play an essential role in solving climate change, poverty, hunger, and other challenges outlined in the United Nations Sustainable Development Goals (SDGs)."
\u201cCEO Brian Moynihan talks about the importance of standardized #ESG metrics and how the private sector can lead the charge while supporting #stakeholdercapitalism. Watch the @WEF replay here: https://t.co/ejf8HWkH9s #DavosAgenda\u201d— Bank of America News (@Bank of America News) 1611701393
In October 2020, the WEF applauded Moynihan for "driving the creation of the ESG metrics, a special set of metrics related to environmental, social and governance issues that help companies measure how they're doing well for society."
At the same time, Moynihan wrote on the WEF website, "Clear signals that corporations are focused on environmental, social, and governance (ESG) priorities at the same time they are providing great shareholder returns is what our employees, clients, customers, and society need."
Reuters reported on Wednesday, "Bank of America Corp. is expanding its newly formed environmental, social and corporate governance (ESG) advisory and financing solutions team with four new hires, according to an internal memo seen by Reuters."
Bank of America CEO Brian Moynihan slammed the Biden administration this week for playing semantic games over economic woes.
Ahead of an economic report that showed the United States experienced two consecutive quarters of GDP contraction — thus meeting the traditional definition of "recession" — the Biden administration repeatedly downplayed the definition.
"In terms of the technical definition, [two negative quarters of growth] is not a recession," said Brian Deese, director of the National Economic Council. "The technical definition considers a much broader spectrum of data points."
Splitting hairs over whether the U.S. is actually in a recession demonstrates how out of touch the Biden administration is with the sentiment of everyday Americans, Moynihan told the Associated Press.
"Recession is a word. Whether we are in a recession or not is really not the important thing," Moynihan said. "It’s what it feels like for the people going through this."
Even with the Biden administration celebrating "zero inflation" in July, Moynihan, who leads the second-largest bank in the U.S., said he remains concerned about high gas prices and especially skyrocketing rent prices.
"Gas prices are coming back down, but rents are going up 10, 12, 15%. And rent can end up taking 40% of these households’ income," Moynihan said. "We are worried about, for the U.S. broad-based consumer, is the increased rents as we go into the natural turn of rents."
Indeed, according to the Bureau of Labor Statistics, shelter prices rose 5.7% year-over-year in July, which the agency explained amounted to "about 40% of the total increase in all items less food and energy" — just as Moyinhan said.
On the question of whether the U.S. is, in fact, experiencing a recession, Moynihan told the AP he would leave that decision to the National Bureau of Economic Research.
Famed economist Nouriel Roubini predicted this week the U.S. economy has two trajectories: "unhinged" inflation or a "severe" recession.
He thus suggested the Federal Reserve aggressively hike baseline interest rates above even 5% to try and lower inflation to the Fed's targeted rate of 2%.
"The Fed funds rate should be going well above 4% — 4.5%–5% in my view — to really push inflation toward 2%," he said in an interview with Bloomberg.
"If that doesn’t happen, inflation expectations are going to get unhinged," Roubini predicted. "Or if that happens, then we are going to have a hard landing. So either way, either you get a hard landing or you get inflation getting out of control."
After President Trump publicly called out Bank of America’s CEO, the company strenuously denies it has ever refused service to Americans who disagree with Democrats.
www.theblaze.com