The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together (One World Essentials)

by Heather McGhee

A common misperception then and now is that subprime loans were being sought out by financially irresponsible borrowers with bad credit, so the lenders were simply appropriately pricing the loans higher to offset the risk of default. And in fact, subprime loans were more likely to end up in default. If a Black homeowner finally answered Mario Taylor’s dozenth call and ended it possessing a mortgage that would turn out to be twice as expensive as the prime one he started with, is it any wonder that it would quickly become unaffordable? This is where the age-old stereotypes equating Black people with risk—an association explicitly drawn in red ink around America’s Black neighborhoods for most of the twentieth century—obscured the plain and simple truth: what was risky wasn’t the borrower; it was the loan.