In the Youtube Debate I mentioned below, Senator Edwards had this quick segue—after saying he's not for reparations, he blamed mortgage rates on racism.
COOPER: Senator Edwards, no dipping and dodging. Should African-Americans get reparations?
EDWARDS:I'm not for reparations. I can answer that question. But I think there are other things we can do to create some equality that doesn't exist in this country today. Today there was a report that, right here in Charleston, African-Americans are paying more than their white counterparts for mortgages than any other place in America, any other place in the United States of America. (APPLAUSE) And here's an example. What is the conceivable explanation for this, that black people are paying more for their mortgage? And, by the way, it's not just low-income African Americans; it's high-income African-Americans. There's absolutely no explanation for this. . . . Transcript of the CNN/YouTube Democratic Debate - New York Times
You can read some Charleston politicians talking about it here:ABC News 4 Charleston - Meeting On Mortgage Disparities, July 24, 2007, and the study itself comes from the National Community Reinvestment Coalition. It's called Income is no Shield Against Racial Disparities in Lending (July 2007)[PDF]
The National Community Reinvestment Coalition is trying to protect what they call "vulnerable and unsophisticated" borrowers from the banks that lend to them, not realizing that they may be protected right out of being able to borrow at all.
I haven't read the whole study, but it seems to imply that if income is equal, the costs of borrowing should be equal, in spite of all the other factors associated with race. There's no reason to believe that—take Michael Vick, for example. Very high income, but I wouldn't call him a good credit risk. Fourteen years ago the Boston Fed published a study that claiming to prove "racial bias in mortgage lending," by showing that African-Americans with what the study said was equal creditworthiness were being turned down for loans that white people were able to get. Peter Brimelow and Leslie Spencer were able to refute this claim by examining the default rates. If African-Americnas were being held to higher standard, they'd have lower default rates. They didn't. [The Hidden Clue By Peter Brimelow and Leslie Spencer, first published in Forbes, Jan 4, 1993]
Edwards may say that there's "absolutely no explanation for this, " and threaten to pass lending laws if people elect him President, but that's because he simply doesn't have a clue.