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Most of the crime-ridden minority neighborhoods in New York City, especially areas like East New York, where many of the characters in Eric Garner’s story grew up, had been artificially created by a series of criminal real estate scams. One of the most infamous had involved a company called the Eastern Service Corporation, which in the sixties ran a huge predatory lending operation all over the city, but particularly in Brooklyn. Scam artists like ESC would first clear white residents out of certain neighborhoods with scare campaigns. They’d slip leaflets through mail slots warning of an incoming black plague, with messages like, “Don’t wait until it’s too late!” Investors would then come in and buy their houses at depressed rates. Once this “blockbusting” technique cleared the properties, a company like ESC would bring in a new set of homeowners, often minorities, and often with bad credit and shaky job profiles. They bribed officials in the FHA to approve mortgages for anyone and everyone. Appraisals would be inflated. Loans would be approved for repairs, but repairs would never be done. The typical target homeowner in the con was a black family moving to New York to escape racism in the South. The family would be shown a house in a place like East New York that in reality was only worth about $15,000. But the appraisal would be faked and a loan would be approved for $17,000. The family would move in and instantly find themselves in a house worth $2,000 less than its purchase price, and maybe with faulty toilets, lighting, heat, and (ironically) broken windows besides. Meanwhile, the government-backed loan created by a lender like Eastern Service by then had been sold off to some sucker on the secondary market: a savings bank, a pension fund, or perhaps to Fannie Mae, the government-sponsored mortgage corporation. Before long, the family would default and be foreclosed upon. Investors would swoop in and buy the property at a distressed price one more time. Next, the one-family home would be converted into a three- or four-family rental property, which would of course quickly fall into even greater disrepair. This process created ghettos almost instantly. Racial blockbusting is how East New York went from 90 percent white in 1960 to 80 percent black and Hispanic in 1966.

The FHA had adopted a system of maps that rated neighborhoods according to their perceived stability. On the maps, green areas, rated “A,” indicated “in demand” neighborhoods that, as one appraiser put it, lacked “a single foreigner or Negro.” These neighborhoods were considered excellent prospects for insurance. Neighborhoods where black people lived were rated “D” and were usually considered ineligible for FHA backing. They were colored in red. Neither the percentage of black people living there nor their social class mattered. Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.

According to Bartholomew, an important goal of St. Louis zoning was to prevent movement into 'finer residential districts . . . by colored people.' He noted that without a previous zoning law, such neighborhoods have become run-down, 'where values have depreciated, homes are either vacant or occupied by color people.' The survey Bartholomew supervised before drafting the zoning ordinance listed the race of each building's occupants. Bartholomew attempted to estimate where African Americans might encroach so the commission could respond with restrictions to control their spread. The St. Louis zoning ordinance was eventually adopted in 1919, two years after the Supreme Court's Buchanan ruling banned racial assignments; with no reference to race, the ordinance pretended to be in compliance. Guided by Bartholomew's survey, it designated land for future industrial development if it was in or adjacent to neighborhoods with substantial African American populations. Once such rules were in force, plan commission meetings were consumed with requests for variances. Race was frequently a factor. For example, on meeting in 1919 debated a proposal to reclassify a single-family property from first-residential to commercial because the area to the south had been 'invaded by negroes.' Bartholomew persuaded the commission members to deny the variance because, he said, keeping the first-residential designation would preserve homes in the area as unaffordable to African Americans and thus stop the encroachment. On other occasions, the commission changed an area's zoning from residential to industrial if African American families had begun to move into it. In 1927, violating its normal policy, the commission authorized a park and playground in an industrial, not residential, area in hopes that this would draw African American families to seek housing nearby. Similar decision making continued through the middle of the twentieth century. In a 1942 meeting, commissioners explained they were zoning an area in a commercial strip as multifamily because it could then 'develop into a favorable dwelling district for Colored people. In 1948, commissioners explained they were designating a U-shaped industrial zone to create a buffer between African Americans inside the U and whites outside. In addition to promoting segregation, zoning decisions contributed to degrading St. Louis's African American neighborhoods into slums. Not only were these neighborhoods zoned to permit industry, even polluting industry, but the plan commission permitted taverns, liquor stores, nightclubs, and houses of prostitution to open in African American neighborhoods but prohibited these as zoning violations in neighborhoods where whites lived. Residences in single-family districts could not legally be subdivided, but those in industrial districts could be, and with African Americans restricted from all but a few neighborhoods, rooming houses sprang up to accommodate the overcrowded population. Later in the twentieth century, when the Federal Housing Administration (FHA) developed the insure amortized mortgage as a way to promote homeownership nationwide, these zoning practices rendered African Americans ineligible for such mortgages because banks and the FHA considered the existence of nearby rooming houses, commercial development, or industry to create risk to the property value of single-family areas. Without such mortgages, the effective cost of African American housing was greater than that of similar housing in white neighborhoods, leaving owners with fewer resources for upkeep. African American homes were then more likely to deteriorate, reinforcing their neighborhoods' slum conditions.

The FHA had adopted a system of maps that rated neighborhoods according to their perceived stability. On the maps, green areas, rated “A,” indicated “in demand” neighborhoods that, as one appraiser put it, lacked “a single foreigner or Negro.” These neighborhoods were considered excellent prospects for insurance. Neighborhoods where black people lived were rated “D” and were usually considered ineligible for FHA backing. They were colored in red. Neither the percentage of black people living there nor their social class mattered. Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.

Black people were viewed as a contagion. Redlining went beyond FHA-backed loans and spread to the entire mortgage industry, which was already rife with racism, excluding black people from most legitimate means of obtaining a mortgage.

These mortgages, which typically cost less per month than paying rent, were directed at new single-family suburban construction.c Intentionally or not, the FHA and VA programs discouraged the renovation of existing housing stock, while turning their back on the construction of row houses, mixed-use buildings, and other urban housing types. Simultaneously, a 41,000-mile interstate highway program, coupled with federal and local subsidies for road improvement and the neglect of mass transit, helped make automotive commuting affordable and convenient for the average citizen.

At First Choice Loan Services, a Dallas mortgage bank Frank Jesse, senior loan originator, is one of the top lenders in the Greater Dallas area and can help you understand the rules and regulations of purchasing a home. We provide a wide range of mortgage products including:- Fha Loans Frank Jesse |First Choice Loan Services Va Loans Frank Jesse |First Choice Loan Services Fixed Rate Mortgages Frank Jesse |First Choice Loan Services Adjustable Rate Mortgages Frank Jesse |First Choice Loan Services Refinancing Options Frank Jesse |First Choice Loan Services Jumbo Loans Frank Jesse |First Choice Loan Services Renovation Mortgages Frank Jesse |First Choice Loan Services Contact info:- First Choice Loan Services Inc. 15303 N Dallas Parkway #150 Addison, TX 75001 Direct: (214) 306-8388 Mobile: (469) 766-8390 FAX: (214) 206-9366 Email: frank.jesse@fcbmtg.com

Dallas mortgage company Frank Jesse | First Choice Loan Services Frank has over ten years of experience in the mortgage industry and has become adept at identifying a customized mortgage option for each client's unique needs. His expertise with the mortgage process ranges from credit qualifying, conventional and government loans, including purchase and refinance loans. He has the acute knowledge and experience to get your loan completed and has the outstanding service to match. He is dedicated to providing each customer and business partner with the highest level of service and professionalism. Put Frank's experience to work so he can help you meet your goals. Whether you are refinancing your current home or looking to purchase a new one, Frank can help you today! We provide a wide range of mortgage products including:- Dallas mortgage company Frank Jesse | First Choice Loan Services Dallas mortgage lenders Frank Jesse | First Choice Loan Services Dallas mortgage brokers Frank Jesse | First Choice Loan Services Fha Loans Frank Jesse |First Choice Loan Services Va Loans First Choice Bank Frank Jesse |First Choice Loan Services Fixed Rate Mortgages Frank Jesse |First Choice Loan Services Adjustable Rate Mortgages Frank Jesse |First Choice Loan Services Refinancing Options Frank Jesse |First Choice Loan Services Jumbo Loans Frank Jesse |First Choice Loan Services Renovation Mortgages Frank Jesse |First Choice Loan Services Contact info:- First Choice Loan Services Inc. 15303 N Dallas Parkway #150 Addison, TX 75001 Direct: (214) 306-8388 Mobile: (469) 766-8390 FAX: (214) 206-9366 Email: frank.jesse@fcbmtg.com

Cash Flow & Loan Paydown Let’s talk briefly on how mortgages work. A mortgage is just a fancy word for “loan on a property.” An owner-occupied mortgage is that same loan, but requires you to live there for a more favorable price or terms. With house hacking, you are likely going to obtain an owner-occupied loan. For the purposes of this discussion, let’s say that you are getting a 3.5 percent FHA loan. If you purchase a property for $100,000, you will be responsible for putting $3,500 down in exchange for a $96,500 loan to be paid back monthly over the next thirty years. Assuming a 5.25 percent interest rate, the monthly payments would be $532.88 per month. Each monthly payment will be a combination of principal and interest. The principal is the actual balance of the loan the bank gives you—in this case $96,500. The interest payment is the amount that you are paying the bank for lending you money. In the first month, the concentration of interest payment will be highest, and as you continue to pay down the mortgage every month, an increasing amount of that $532.88 payment will be applied toward the principal. Take a look at the amortization schedule below to see how each payment over the next twelve months is comprised. Do you see how the interest portion of the payment decreased over time, but the amount applied to the principal increases? When you are paying down your principal, you are building equity in the property by paying back the balance of the loan. The best part about house hacking is that you are not actually paying the loan: Your tenants are! Not only are you living for free, and maybe even cash flowing, you own more and more of your house each month.

Because the FHA’s appraisal standards included a whites-only requirement, racial segregation now became an official requirement of the federal mortgage insurance program. The FHA judged that properties would probably be too risky for insurance if they were in racially mixed neighborhoods or even in white neighborhoods near black ones that might possibly integrate in the future.

By 1950, the FHA and VA together were insuring half of all new mortgages nationwide.

The FHA favored mortgages in areas where boulevards or highways served to separate African American families from whites, stating that “[n]atural or artificially established barriers will prove effective in protecting a neighborhood and the locations within it from adverse influences, . . . includ[ing] prevention of the infiltration of . . . lower class occupancy, and inharmonious racial groups.” The FHA was particularly concerned with preventing school desegregation.

To solve the inability of middle-class renters to purchase single-family homes for the first time, Congress and President Roosevelt created the Federal Housing Administration in 1934. The FHA insured bank mortgages that covered 80 percent of purchase prices, had terms of twenty years, and were fully amortized. To be eligible for such insurance, the FHA insisted on doing its own appraisal of the property to make certain that the loan had a low risk of default. Because the FHA's appraisal standards included a whites-only requirement, racial segregation now became an official requirement of the federal mortgage insurance program. The FHA judged that properties would probably be too risky for insurance if they were in racially mixed neighborhoods or even in white neighborhoods near black ones that might possibly integrate in the future. When a bank applied to the FHA for insurance on a prospective loan, the agency conducted a property appraisal, which was also likely performed by a local real estate agent hired by the agency. as the volume of applications increased, the agency hired its own appraisers, usually from the ranks of the private real estate agents who had previously been working as contractors for the FHA. To guide their work, the FHA provided them with an Underwriting Manual. The first, issued in 1935, gave this instruction: 'If a neighborhood is to retain stability it is necessary that properties shall continue to be occupied by the same social and racial classes. A change in social or racial occupancy generally leads to instability and a reduction in values.' Appraisers were told to give higher ratings where '[p]rotection against some adverse influences is obtained,' and that '[i]mportant among adverse influences . . . are infiltration of inharmonious racial or nationality groups.' The manual concluded that '[a]ll mortgages on properties protected against [such] unfavorable influences, to the extent such protection is possible, will obtain a high rating.' The FHA discouraged banks from making any loans at all in urban neighborhoods rather than newly built suburbs; according to the Underwriting Manual, 'older properties . . . have a tendency to accelerate the rate of transition to lower class occupancy.' The FHA favored mortgages in areas where boulevards or highways served to separate African American families from whites, stating that '[n]atural or artificially established barriers will prove effective in protecting a neighborhood and the locations within it from adverse influences, . . . includ[ing] prevention of the infiltration of . . . lower class occupancy, and inharmonious racial groups.

The three main players in the MBS market are: • Government National Mortgage Association, or GNMA (pronounced “Ginnie Mae”), is backed by a federal agency and guarantees mortgage payments on loans issued through federal loan programs (like the VA and the FHA). Unlike other MBS, bonds guaranteed by GNMA are backed by the full faith and credit of the US government, just like Treasury bonds. • Federal National Mortgage Association, or FNMA (“Fannie Mae”), is a private corporation that buys mortgages from large commercial banks, repackages them into bonds, and sells those bonds to investors. FNMA is not backed by the federal government (even though the government created it), so these bonds carry higher credit risk (the risk that you won’t get your money back). • Federal Home Loan Mortgage Corporation, or FHLMC (commonly called “Freddie Mac”), works almost the same way as FNMA. It buys up mortgages from smaller lenders, like savings and loan banks or credit unions, then packages them to create MBS. Freddie Mac bonds are not backed by the US government.

The American real-estate industry believed segregation to be a moral principle. As late as 1950, the National Association of Real Estate Boards' code of ethics warned that "a Realtor should never be instrumental in introducing into a neighborhood ... any race or nationality, or any individuals whose presence will clearly be detrimental to property values." A 1943 brochure specified that such potential undesireables might include madams, bootleggers, gangsters - and "a colored man of means who was giving his children a college education and thought they were entitled to live among whites." The federal government concurred. It was the How Owners' Loan Corporation, not a private trade association, that pioneered the practice of redlining, selectively granting loans and insisting that any property it insured be covered by a restrictive covenant - a clause in the deed forbidding the sale of the property to anyone other than whites. Millions of dollars flowed from tax coffers into segregated white neighborhoods. "For perhaps the first time, the federal government embraced the discriminatory attitudes of the marketplace," the historian Kenneth R. Jackson wrote in his 1985 book, Crabgrass Frontier, a history of suburbanization. "Previously, prejudices were personalized and individualized; FHA exhorted segregation and enshrined it as public policy. Whole areas of cities were declared ineligible for loan guarantees." Redlining was not officially outlawed until 1968, by the Fair Housing Act. By then the damage was done - and reports of redlining by banks have continued.

the FHA would not make or guarantee mortgages for borrowers of color,” she said. “It would guarantee mortgages for developers who were building subdivisions, but only on the condition that they include deed restrictions preventing any of those homes from being sold to people of color. Here we have this structure that facilitated…white homeownership, and therefore the creation of white wealth at a heretofore unprecedented scale—and [that] explicitly prevented people of color from having those same benefits. To a very large degree, this was the genesis of the incredible racial wealth gap we have today.

the FHA does require an additional payment, called "Private Mortgage Insurance." This "PMI" insurance protects the lender and is required when the down payment on an FHA loan is less than 20%. The extra PMI payment can make your monthly payment slightly higher, thus reducing your cashflow.

Americans. All had good credit ratings, and banks were willing to issue mortgages if the FHA would approve. But the agency stated that “no loans will be given to colored developments.” When banks told the real estate agent that without FHA endorsement they would not issue the mortgages, he approached the Prudential Life Insurance Company, which also said that although the applicants were all creditworthy, it could not issue mortgages unless the FHA approved. Today, Fanwood’s population remains 5 percent black in a county with a black population of about 25 percent.

The FHA required developers to use restrictive covenants barring blacks, and it denied black families the mortgages that allowed working-class whites to leave public housing.

The FHA was particularly concerned with preventing school desegregation. Its manual warned that if children “are compelled to attend school where the majority or a considerable number of the pupils represent a far lower level of society or an incompatible racial element, the neighborhood under consideration will prove far less stable and desirable than if this condition did not exist,” and mortgage lending in such neighborhoods would be risky.