Rod Watson: Report on racial gap in mortgages reveals a ‘tax’ ripe for cutting

Liberals complain about the regressive nature of the sales tax.

And everyone complains about the income tax.

But when are we going to go after the tax that really matters: The Black tax? And the Brown tax? And the Asian tax?

Those are the huge extra costs borrowers of color pay for home mortgages simply because they are borrowers of color.

Last week’s report from State Attorney General Letitia James was just the latest to document the systemic discrimination baked into the homeownership industry, discrimination whose impact lingers long after overt practices like redlining and restrictive covenants have been banished.

James’ report on “Racial Disparities in Homeownership” found that today’s gaps can’t be explained away by socioeconomic differences. Instead, her report found, applicants of color get rejected far more than white applicants “even when controlling for credit score, income, size of loan, debt-to-income ratio, loan-to-value ratio and year of application.”

Even after neutralizing such factors, a Black or Asian applicant was 43% more likely to be rejected than a white applicant, and a Latino applicant was 33% more likely to be turned down.

And when applicants of color were approved, they were charged higher interest and fees that added a few thousand dollars to the cost of the loan.

“At each stage of the homeownership process, Black and Latino borrowers are disproportionately taxed,” James wrote, calling it out for what it is: a levy on being a minority in America. “This economic punishment starves communities of resources and deprives borrowers of color of the power to amass wealth.”

In fact, after looking at loans from 2018 to 2021, James concluded that Black and Latino borrowers ended up paying an estimated $200 million more than white and Asian applicants, though Asian borrowers also…