1. Why would Frank and Ethel enter into such a contract with terms that seem so clearly unfavorable when examined now? Normally two parties do not enter into a contract unless both sides believe they will be better off. Renting seemed like a better option, especially since most of their earnings, including social security were "turned over" to make the payments.
2. What was the quality of the house at the beginning of the contract? Whose responsibility was it to maintain the house, per the contract?
3. What was the credit quality of Frank and Ethel?
4. Why was the end "inevitable" for Frank and Ethel? Seems like they received bad legal advice and made a poor investment decision.
5. How did crime statistics for these "redlined" areas compare to the other areas deemed "safer" by the government organization's colored map. The article seems to suggest that if government did not produce a map with colors on it, it would be impossible to assess risk levels in terms of bank mortgages.
6. When citing wealth comparisons, household comparisons are not appropriate because the size of households vary (i.e. number of people working, single parent, etc), as well as average age. For example, a comparison of home ownership of married couples in similar age brackets should be examined.
7.Clearly government policy had unintended effects. There is no doubt about it. We are not far removed from a financial crisis that was rooted in HUD policies that drove underwriting standards down in order to get more people into homes which clearly they could not afford. Increasing home ownership was promoted by both Democratic and Republican administrations. Is the author proposing more government solutions?
8. Only government can discriminate without risk economically as politicians do not typically pay the price for being wrong as they are out of office long before the real effects of the policies they put forth are discovered. Not to mention they are not risking any capital in doing so.
9. What are some examples of current discrimination (i.e. who is doing it where and when)? The article ends with mention of supermarket locations. It is no secret that not all investments have the same risk. Higher crime areas require larger investments in security for example. This higher cost is passed on through the price of goods in such areas. All residents, including the law abiding, pay the price for those in the community that decide not to obey the law.
Danielle
3 years ago
This is a great project. Thank you for committing to this type of work.
Nick
3 years ago