Frontline: Your Loan Is Denied

This incisive Frontline program asks whether race plays a part in granting or denying home mortgage loans, and makes a good, if sad, case that it does indeed. Several black couples in Chicago are interviewed about their experiences with local banks. Typical is the case of Peter and Dolores Green, a white-collar couple who wanted to purchase an apartment complex, but were turned down by the bank. In a subsequent investigation their loan officer said the property was located on the wrong side of town, the bank president said the bank didn't handle that kind of loan, and the FDIC said that the loan was denied because of a low appraisal. Only the loan officer who later left the company alluded to the real reason--the couple wanted to purchase property in a "red-lined" black neighborhood. Although the practice of "red-lining," or prohibiting loans to certain communities is illegal, it is an ongoing problem. In the second half of the video, the Frontline crew goes to the regulatory boards to talk to the policy makers and enforcers, and basically hears the same story over and over: "there's no problem." But several ex-employees, who quit in frustration because they felt the agencies simply ignored the problems, say otherwise. Although it's difficult to prove racism in many of these cases, some study figures are truly alarming. In one government-prompted study, for example, it was found that high-income blacks were turned down for home mortgage loans more often than low-income whites. The tape concludes with a look at The Dartmouth Plan, a company which regularly bilked "red-lined" homeowners who wanted to make home improvements but were unable to secure loans from the bank. The Dartmouth Plan was to have the homeowner sign a second mortgage (unbeknownst to him or her) and then make payments with an 18% interest rate tacked on. A disturbing, thought-provoking documentary. Highly recommended. (Available from: PBS Video, 1320 Braddock Place, Alexandria, VA 22314-1698; (800) 344-3337.)