My Experiences With Unfair Lending Practices - Expert Edition Episode 29 (Classic Episode)

In this classic episode, Naseema confronts the issue of mortgage discrimination and shares her personal experiences with predatory lending. Joined by certified financial planner Leisa Peterson, they delve into the details of Naseema's recent home-buying process, exposing the subtle yet prevalent forms of discrimination that still persist today. Naseema's frustration and determination to shed light on this topic are palpable as she discusses the importance of understanding the signs of discrimination, asking the right questions, and reporting such instances to put an end to this unfair practice. Leisa offers valuable insights on the subjectivity in the mortgage underwriting process and emphasizes the need for education and advocacy to ensure fair treatment and access to affordable financing for everyone, particularly marginalized communities. Through their candid conversation, Naseema and Leisa empower listeners to be informed, assertive, and proactive when navigating the complex world of home loans.

—-

Support the show

Please join me here, and follow me on social media, Instagram, and Facebook.

Need help getting started on your path to financial freedom? Start Here

Join the Financially Intentional Community

Oh and please subscribe and leave a review on whatever app you're using to stream this podcast.

Get my book Smart Money

Subscribe & Review

Love this episode? Please subscribe and leave a review on your favorite podcast platform. 

TRANSCRIPT:

[00:00:00] Naseema: Oh, all right. Nurses on fire. We are back with our certified financial planner, Leisa Peterson, and we're back today and I'm little heated right now and I'll tell you why. So, we talked about lending discrimination, a couple episodes back and briefly mentioned that I was going through the process and it deeper dive.

In this episode and talk more about the specifics of what's going on and how this can help you so that when you are buying a home, You won't be a victim of these things. So let my testimony save you from yes. Being screwed by predatory lending that's still going on. And so, mortgage discrimination is a, a.

Real and prevalent thing is technically illegal, but it's still happening right now. So it was banned in what, 1968 by the Fair Housing Laws that were put in place. It's part of the civil rights movement, but they still find ways like. All the predatory lending that was happening that affected historic, I mean like predominantly people of color in the last great recession.

But it's still happening. Even though people will tell you that there's no way that they can discriminate against you because. Oh, it's just based off of your credit score and your down payment. So, hey Leisa, first of all, hey, obviously, obviously I'm like talking too much because I'm like all the way heated, but

[00:01:51] Leisa: This happens in life. People Yeah, people know and they can relate to you cuz we have all been in this position where we feel. A sense of oppression and yet we really struggle with knowing what to do with it. And I feel like that's part of this conversation.

[00:02:08] Naseema: Yeah. And I think just the most important part, and we talked about it last time, but like knowing and having that feeling like you're not being treated fairly.

But not having the words or the context to explain it, but just thinking that maybe you're tripping or maybe you don't wanna speak up and be the B I T C H or looked at as that angry person because you're speaking up and you just accept it. It is what it is like a lot of times. I mean, and this is just in general and we've talked about this, Leisa, like with all the stuff that's happening with the police brutality, with the things that go on just in our community that are oppressive, we just.

Suck it up and say, you know what, this is the black tax. Like it is what it is. And we keep on going and like it gets to a point where enough is enough. And I think that, right now as a country, like we came to that conclusion like collectively and yeah. And for me it just got to a point where, I'm there because it's been, it's happened to me over and over again and I was even sharing with you when I was so.

Secret. No big secret. I'm working on a book and so one of the chapters the sections I was talking about in the book pointed to discrimination. So of course I had to go back and do some research and make sure I had my dates right about, when laws were enacted and all this kind of stuff.

And I'm reading through what counts as lending discrimination? And I just keep on getting hit over and over about examples that have happened to me, like in this present situation and in the past where these things are indications of discrimination. And. I'm tired. These are like I, I, but now I'm just like pissed off.

But at the same time, I'm just like, this is information that I think you guys like need to know. You need to know what the signs are and you need to know proactively the questions to ask, but also who to report these instances to so that it stops happening. And so that's what we wanna talk about.

[00:04:29] Leisa: I'll let you talk when, yeah.

When you first bought your house. Mm-hmm. I imagine there was something that was offered up as you were negotiating. It's a brand new home. You were working with the builder to come up with your deal and they put an offer before you that was. In to incentivize you to work with their lender versus any lender that you choose.

And they cannot restrict that anyways. So they used money to encourage you, let's just use that. We're gonna give you $10,000 and that's gonna, help you out if you work with our lender. Is that right? Did I get that

[00:05:08] Naseema: right? Yeah, exactly. So yeah, when, when I'm presented the deal, they're just like, oh, there's like these bonuses and these bonuses.

And if you go through Pul Team Mortgage, you'll get this $10,000 builder credit that comes along with it. And so I'm like, yeah, I already have a li a lender that I work with and that I'm very comfortable with. But I'm just like, oh, it's a no-brainer that I would go through them because I mean, Wouldn't they?

If they're offering the best rates plus I get this $10,000, like that just makes sense. So it doesn't even make sense. And it's supposed to be a super streamlined process, so it just makes sense for me to go through them. But it hasn't, it wasn't a streamlined process. It was actually a very grueling process where, you know, and not saying that, Going through any kind of process wasn't, isn't grueling.

You're disclosing all kind of financial information. They're asking you for this. They're asking you for line items in your banks, in your bank statement, like, where did this money come from? I mean, they wanna make sure that's no kind of fraud on your end that's coming through, and they wanna make sure that you can ultimately afford the mortgage, so they're doing their due diligence.

But when they're not responding in a timely fashion they're dragging their feet through this mortgage process, and they're blaming it on external factors. So, I've purchased this house in May. It's now the end of July and I have yet to get an approval. So even and then I, I questioned it internally.

I went and said, after they kept on asking me for documents, which I didn't feel like was relevant, and they pulled my conditional approval on my loan I actually went into them and I asked to speak to a compliance officer with a lens. Or diversity and inclusion and talked to her about the process and she even recommended that, like I look outside and see if I can get competitive rates.

And so I did. I reached out to the lender who I usually work with, and not only did she give me rate that was almost a whole percentage point cheaper she was able to get me approved, totally approved for the loan in a week when these people have been dragging their feet. With all the same documentation, with all the same transactions in my bank account, I was able to get approved at a lower rate, knowing that when using an outside lender, I would lose that $10,000 credit.

So I went back to my mortgage, to Pulte to the Builder's mortgage company and I said this is the rate that I got. Here's the truth and lending statement. Here are all the fees. And they were like, yeah, we can match that. And then they went ahead and matched the rate, but with a buy down or they put points on my mortgage points on, on, what is it called?

The origination fees on there. Yep. Mm-hmm. So that at closing, I would have to bring $10,000. So it looked like they were presenting this apples to apples picture because they're saying if you go through us then. You'll get this $10,000 incentive, but no, it's not. It's what you said, Leisa, and there's a perfect word for it.

It's extortion because it's making you take this loan, which outside of, if you take it out of this context. It wouldn't make sense. Right?

[00:08:40] Leisa: Cause they moved the money. Yes. Yes. They, they said, we're gonna give you $10,000 as an incentive in, let's say closing costs. But in reality, they weren't giving you anything.

That's what's coming out through the process. They literally will like, Saying in reality to get a comparable rate out of our system, it would cost you $10,000, which basically means that the money that they offered you isn't even for real. It just disappeared, right. Overnight. Right. And you and, and one of the things I think that we're learning through this process, There's actually several things.

Is it okay if I just share a couple things that I, go ahead. Mm-hmm. From what you described? Yeah. So number one is, is this was a good lesson for both of us to say that when we go into an arrangement and somebody's offering a financial incentive, especially in a home buying situation where they're wanting you to use their lender, the question.

Now in retrospect would be, where is that money coming from and is it just being moved over and I'm being charged more for the rate? And, and it really doesn't exist. Like just asking the question like, where does that money come from? Who's paying it? And how do I make sure that that's really, really going to be money that I am receiving?

Because that's how you interpreted it, correct? Mm-hmm. Mm-hmm. Like it's $10,000 to me, and there's not gonna be any cost. I'm not gonna get a, they didn't say we're gonna give you $10,000 and you're gonna have a higher rate. I'm just making sure everybody's listening and hearing this. Right. They didn't say that.

They said You're gonna get a comparable rate. And you're gonna get $10,000. Exactly. But now the story has changed. So that's one thing. The other thing I just wanna mention, and we did not talk about this, but you're, you're probably not gonna love this, but I'm gonna still say it anyways. We talked about the subjectivity in the price pricing in our last episode, right?

That, that there's this wiggle room where people can charge more if they think that you'll pay more, right? The wiggle room and the pricing. Unfortunately, the whole entire mortgage underwriting process is incredibly subjective too. Meaning they can ask one person for a document and not have to ask another person for that same document.

And I think this is the part where it's so freaking subjective that you won't know if somebody's I'm gonna give you the benefit of the doubt because you're a doctor and maybe have white skin and whatever, or. I'm gonna ask for more documentation from you because this is what you like, or this is what your profession is, or whatever it is.

Like they have that discrimination in every single loan. So I think I'm just sharing this because I didn't say it before, but I just wanna be clear, there is incredible subjectivity and because I know so much when I go into negotiate a mortgage, I call them out on everything. So like the question I said, where's that money coming from and how is this gonna affect me?

And why are you charging these fees? And all that is one part of it. But the other part is, is I need you to explain why you need that documentation. I. And what it, why it's so necessary. And then they've gotta, there's no reason why you can't ask those

[00:12:08] Naseema: questions. So I'm not sure if this helpful at all.

Yes, I did. And I, I did ask that question and that was part of that first, that first like chain of emails that I sent out before I even shopped around. It was like, Why are you asking me for this? I think that this is unnecessary information I provided voluntarily provided X, Y, and Z information and these documents.

Why are you still asking me for more? And then they went back and retracted and said, oh yeah, we don't need these documents. And so I, I do know that. Yeah. Yeah. That's amazing. Yeah, I do know that. And it's amazing. I know that because now I've been through two different processes with underwriters, and I know that there's certain things that they ask, some certain things.

One person will ask for that another person won't. And so yeah, I get it. Right. I get it.

[00:13:01] Leisa: Yeah. Mm-hmm. And I mean, I hate talking about this stuff, quite frankly, but I also feel like. What, what we're trying to do in our conversations is bring to light that the importance of maybe trusting, and I know one thing you shared before we got on the call was, It's hard to be doing this.

It's exhausting and it's frustrating to always feel like you have to be on guard yes, like asking all these questions and hopefully it won't always be this way, but I think that as a woman, a person of color, I mean, I think we just owe it to ourselves to be really educated about this process when we go through it, so that maybe it's easier and, and you end up getting the best deal that you possibly can.

Cuz that's all we're, we're wanting people to have as streamlined of process as possible. And then also getting a great rate,

[00:13:58] Naseema: right? Because like I was saying, access to affordable lending. Is super important for wealth building, especially if we have to depend on financing, which a lot of people who are just coming into even the ability to just step outside of poverty have to depend on.

We are not getting passed down inheritances. We're not gi given money in the backend for down payments. I mean, so a lot of our wealth has to come from leverage and using, our good incomes and our good credit because we finally got there to be able to. Get affordable financing and that, and that's super important and other people's ability to get affordable financing is what HA helped them build wealth and be able to pass down a legacy to their family.

But yeah, it's being denied to so many people of color. And so I mean, like to highlight this again, is not to talk, not to get people upset, as upset as me and riled up, but I'm only upset because it's frustrating to me that I only know this because. Now I'm so ingrained in this personal finance space that I'm actually paying attention, but my avatar, my audience does not know this, and so I'm mad for them.

Mm-hmm. Mm-hmm. I'm mad for the people that continuously get taken advantage of over and over again. Yeah. And we'll, and we'll continue unless we, we step up and we actually do something about it. And so let's talk about the ways that we can do something about it again. Yes. And, and so Leisa, so on the pro preventative side, on the proactive side, before you even get into these deals, what kind of questions should you be asking?

[00:16:04] Leisa: I think that the big one that we explored is the importance of when you decide you're gonna buy a house, you need a mortgage. First of all, I like getting pre-approved before you even go out to look for a home. So you gotta be careful because you've got a 30 day window in which to pull multiple credit reports and shop around.

But there's huge merit in already having a letter. And we used to tell people this, if you're gonna buy a house, do that work beforehand. So when you go in to make your offer, it's already clear that you have a conditional approval based on, a certain amount and so forth. It makes your offers more attractive.

You've already got a relationship and you've got a baseline. Then after you get something in contract, then you can go out and again, that's when you do your, your shopping. You're like, I'm ready to lock it in. You're gonna ask all your questions. You're gonna compare your truth and lendings next to each other.

You're gonna make sure that there's no funny business, right? If something's weird, you're gonna call people out on it and say, I don't understand this. And that is like the best thing you can say to financial people is I don't understand this, but I need you to walk me through line item by line item why these things are being charged.

And then you become empowered, I think. Just, I'm just saying this out loud, like you don't become disempowered by asking that question. You actually show them that you're not gonna let anything cross past you without diligence, and it's setting a tone for how you want that person to think of you, that nothing's gonna pass you by.

[00:17:43] Naseema: Does that help? Yeah. Yes, definitely, definitely. And yeah, I think that that's one part that I didn't do, and usually I do, but I wasn't really expecting to buy a house. But yeah, I mean, like I should have, came there with a pre-approval, which I could have easily gotten. But like I said, they make the offer so enticing.

It's like, why would you? And that's like new housing. Like when people go to new housing, they're just like, yeah, I can afford this. That's totally the lore. And so it's not the lender's fault, like they're just presenting a product for you to buy, and they know how to sell it in a way that, it's irresistible.

So that's marketing. That's good advertising, yeah. And I

[00:18:26] Leisa: just wanna say, hence why I left the industry. There's just a lot of not good stuff going on out there, like this whole switching and saying, we're gonna give you 10,000, and then it goes away like that is, Par for the industry. This is why we have to approach it with buyer beware, and this applies to no matter who you are, this is going on for everybody.

Okay? This is why we talk so much about empowerment.

[00:18:55] Naseema: Yes, yes. And then yeah, in the back end, I just wanna leave you with some tools. So if at any point you feel like lending discrimination is going on, your resources will be to contact your state attorney general office, and they might have some extra laws, some equal opportunity laws in place, and be able to advise you on your rights.

That's number one. Number two. File a complaint against the Consumer Financial Protection Bureau. Get a third party eye looking at that. And they also have just a collection of discrimination claims already out there if. In advance. You wanna look and see, has this mortgage company already had some complaints out?

And then you're also able to reach out to hud for Fair Housing in equal opportunity. There are fair housing in equal Opportunity office to file a complaint as well. If you fall under like HUD guidelines. So those are the resources that. Even if you are like questioning, is this discrimination or is it, if it isn't, I think that this isn't gonna change unless you actually file against these people and, and you take it seriously because it would be easy for me to be like, you know what, this is just easier.

I'll just, go with this rate, which I know I, I might have done. Mm-hmm. But a couple years ago, but I'm not gonna do that. I'm not doing it. I'm not gonna sit down and if it comes to the, the point where I have to get a lawyer involved, that's what I'll do because, I'm not scared and it don't make for a good story anyway.

[00:20:43] Leisa: You're good at taking your own life and sharing it with all of us. So thank you because you guys, so if somebody doesn't do it, then nobody knows.

[00:20:53] Naseema: Exactly. All right. A lot of people go through it and they don't talk about it, and so it keeps on happening over and over again. My whole goal is just to prevent people from making the same mistakes that I do so that they can accelerate to a path of financial freedom.

Even faster than I can. And I don't mind being the Guinea pig. That's what I'm here for. That I feel like that's my karma. That's my destiny to serve other people to use my story as testimony so that people can live better lives and know what rights that they have. Because I feel we've been disempowered for so long.

I mean, as women, as people of color, just in general, it's time to turn things around. And so whatever little thing that I can do, any little thing that can happens in my life that can help just even one person, I'm always down to share a story and also just share actionable items that you can do, things that you can do in order.

To make sure that it doesn't happen to you. Not just talk about, the subjective, like really give you things, tools that you can use to benefit you. So that's what come about Leisa.

[00:22:10] Leisa: So beautiful. It's so beautiful and you're so inspiring. And I mean, I do, I I am sorry that It's been as difficult, and I know that if anyone could take your experiences and help other people through it, you're the one and you're really good at spreading the words.

So thank you. You've always touched my heart and you show me things that, I just, I, I didn't quite realize. And I'm really appreciative of that because I feel like I become a better person learning about it from you.

[00:22:43] Naseema: Aw. Thanks Leisa. Thanks for being an ally. Like always, always like I appreciate you.

Mm,

[00:22:53] Leisa: thanks.

Hey there I’m Naseema

My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.

Learn about the course

---

Join the Facebook Community

Join the Financially Intentional community and get access to resources to guide you on the path to Financial Freedom.

---

Watch these Videos To Learn How to…

---

Keep Listening

Here are some more episodes you may enjoy…