Quote:
Originally Posted by sebastian_dangerfield
I get that. But what if you're not using ethnic criteria? What if you're using default rates among properties nearby? Zillow already runs a search that can give you all nearby foreclosures. Imagine what commercially used algorithms can provide.
I'm not missing your point. I agree that if you base lending on ethnicity, that's racism. But what if you're just fucking over people in high default areas?
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If you're not using the individual's creditworthiness to perform your credit analysis, and instead increase the interest rate based on the neighborhood's characteristics, then what are you doing?
If you're saying that houses in certain neighborhoods tend to lose their value more than in other neighborhoods, then all you're telling me is that your model for determining how much the underlying property is worth is incorrect.
If you're telling me that the average mortgagor in one neighborhood with the same credit score as the average mortgagor in another neighborhood has a higher default rate because of cultural reasons, I'm going to say that you need to prove that to me because it sounds like you're throwing bullshit at me to cover up a practice that is based on stereotypes.
TM
