Bank of America is facing backlash after GOP presidential candidate Vivek Ramaswamy drew attention to one of its little-known programs.
In a tweet posted Wednesday, he linked his millions of followers to a 2022 page on Bank of America’s website announcing a racially based program aimed at “black and Hispanic communities.”
Look:
Bank of America is now providing *loans without down payment* for home buyers in “black & Hispanic Communities.”
Mark my words:
This act of “anti-racism” today will be called “systemic racism” tomorrow – when minorities end up defaulting on these loans.https://t.co/ZV7FFc3VKu
— Vivek Ramaswamy (@VivekGRamaswamy) December 27, 2023
Known as the Community Affordable Loan Solution, the program ostensibly helps black and Hispanic families by requiring no down payment, no closing costs, and no credit scores.
“Bank of America today announced a new mortgage solution for first-time homebuyers that offers a bank-provided down payment and no closing costs,” the page Ramaswamy linked to reads.
“The Community Affordable Loan Solution is available for properties in Black/African American and Hispanic-Latino communities, as defined by the U.S. census, in Charlotte, Dallas, Detroit, Los Angeles and Miami,” it adds.
The announcement continues by noting that neither mortgage insurance nor a minimum credit score is needed to obtain a loan.
“The Community Affordable Loan Solution is a Special Purpose Credit Program which uses credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments. … Individual eligibility is based on income and home location,” it reads.
The announcement also claims “[a]nyone from any race or ethnicity is welcome to apply,” though this seems to be contradicted by the stipulation that the program only applies to “properties in Black/African American and Hispanic-Latino communities.”
Federal Home Loan Bank of Atlanta is approving loans based on DEI criteria, but it gets worse… https://t.co/yG9zPbPQzj
— Raymond Richardson (@Bubbadogg69) December 2, 2023
The announcement goes on to justify its racial preferences.
“According to the National Association of Realtors, today there is a nearly 30-percentage-point gap in homeownership between White and Black Americans; for Hispanic buyers, the gap is nearly 20 percent. And the competitive housing market has made it even more difficult for potential homebuyers, especially people of color, to buy homes,” it dubiously claims.
“Homeownership strengthens our communities and can help individuals and families to build wealth over time,” Bank of America official AJ Barkley said in the announcement.
“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,” he added.
All this is very bad not only because of the racial aspect but because no down payments, no closing costs, and no credit scores are exactly how the last financial crisis erupted.
“The subprime mortgage crisis of 2007–10 stemmed from an earlier expansion of mortgage credit, including to borrowers who previously would have had difficulty getting mortgages, which both contributed to and was facilitated by rapidly rising home prices,” according to Federal Reserve History.
“Traditionally, potential homebuyers found it difficult to obtain mortgages if they had below-average credit histories, provided small down payments or sought high-payment loans,” the site continues.
And justifiably so — because of the risks inherent in loaning out money to unreliable parties.
Let me get this straight. . .
1. Bank of America
2. Zero down payment Mortgage
3. No minimum credit score#Issa Trap
2008 subprime mortgage all over again. https://t.co/qXxlKPDLxf
— Kenan Grace. Build Wealth (@KenanGrace) September 6, 2022
But when the rules were dropped preceding the Great Recession, there was a rush of unqualified folks obtaining home loans they simply couldn’t afford.
Responding to Ramaswamy’s post, many critics remarked that the same thing is bound to happen again thanks to Bank of America’s desire to appease the black and Hispanic communities.
Look:
This was how the banking crisis of 2008 started.
Combination of ignorance and willful destruction.— Albert Latham (@albert1776) December 28, 2023
Do people not remember the home mortgage meltdown that was caused by predatory lending and loose requirements?
— Jon Lareau (WWRKDS) (@WWRKDS) December 28, 2023
I can’t believe they’re doing this again. Didn’t learn after the last bubble and financial meltdown I guess. 2008
— Patricia Therese (@ptheresen) December 27, 2023
This is the same lending that led to the 2008 financial crisis, and BOA played a major role in it back then
— Vince Langman (@LangmanVince) December 28, 2023
Sounds like history is about to repeat itself in a few years just like what happened between 2007 through 2010 & caused a complete collapse of the housing market and record foreclosures for the lower & lower middle classes
— America First Patriot Living In NEWSOM SHITHOLE (@DoTheRightWing) December 28, 2023
Critics were also incensed over the racial nonsense.
“Bank of America is telling people to willfully segregate themselves. Wake. UP! We are regressing, and pioneers like MLK and Rosa Parks would be disgusted,” one critic tweeted.
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V. Saxena is a staff writer with a decade of experience as a professional writer, and a lifetime of experience as an avid news junkie. He holds a degree in computer technology from Purdue University. Saxena also contributes to BizPac Review.
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