THE COLOR OF LAW EXAM QUESTIONS

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THE COLOR OF LAW EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -53 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: What was the FHA's biggest impact on segregation?

Answer:

Financed entire subdivision developments as racially exclusive enclaves. Example- Levittown entirely publicly assisted and could not sell to Black families under the conditions of receiving federal funds.

Question 2: subprime mortgage loans

Answer:

High-interest-rate loans to home buyers with above-average credit risk.

Question 3: How did tax rates impact African American families?

Answer:

• Higher property taxes that homeowners paid

• Contribution to the deterioration of their neighborhoods, because after taxes they had no money left

for maintenance.

• Led to loss of homes as speculators were permitted to pay off delinquent tax liabilities, seized the

property, evicted the owners, and resold the property and an enormous profit.

Question 4: What remedies to segregation does Rothstein propose?

Answer:

• Addressing African American middle-class suburbs as well as low-income.

• Ban on zoning ordinances that prohibit multifamily housing or that require all single-family homes in a

neighborhood to be built on large lots with high minimum requirements for square footage.

• Amendment to the tax code- deny the mortgage interest deduction to property owners in suburbs that

do not have or are not taking aggressive steps to attract their fair share of low and moderate-income housing

• "Fair share requirements" based on income not race (example NJ and MA implemented) by

addressing the isolation of low-income families in urban areas and their absence from middle-class suburbs.

• Inclusionary Zoning

Question 5: Why is Rothstein hesitant to suggest desegregation policies?

Answer:

• The remedies of desegregation policies "are inconceivable as long as citizens, no matter their political

view, continue to accept the myth of de facto segregation."

• But a start could be addressing: employment policies, a minimum wage that returns to historical level

and keeps up with inflation, transportation infrastructure improvements that improve access to jobs.

Question 6: Why weren't FHA insured mortgages issued to African Americans?

Answer:

Due to economic zoning practices- "it rendered African Americans ineligible for mortgages because banks and the FHA considered the existence of nearby rooming houses, commercial development, or industry to create risk to the property value of single-family areas".

Question 7: Why did homes under contract sales agreements deteriorate?

Answer:

-African Americans struggle to make inflated monthly payments -Often no time to upkeep home while working more than one job.-Apartments were subdivided by a speculator and charged the tenants high rents

Question 8: What programs deepened racial segregation?

Answer:

• Low-income housing tax credit: subsidizes developers whose multiunit projects are available to

low-income families.

• Housing choices voucher- Section 8: subsidizes families' rental payments so they can lease housing

that they would not otherwise be able to afford.

Question 9: Housing Act of 1949

Answer:

Permitted local housing authorities to continue to design separate public projects for Blacks and whites or to segregate within projects

Question 10: Contract Sales Agreements

Answer:

provided that ownership would transfer to the purchaser after 15-20 years but if a single monthly payment was late, the speculator could evict the would-be homeowner who accumulated no equity. The inflated sale price ensured that payments would be late.Question 11: Were African Americans given opportunities for upward mobility in the service-sector?

Answer:

No- African Americans were restricted to menial jobs with no opportunities for higher position or a higher paying job.Question 12: How did the fed gov't impose racial segregation in areas without preexisting racial problems?

Answer:

• segregated housing by race

-example: california with defense workers and public housing development

Question 13: Installment plans

Answer:

no equity is accumulated from down or monthly payments

Question 14: Homeowners Loan Corporation (HOLC)

Answer:

purchased existing mortgages that were subject to imminent foreclosure and then issued mortgages with repayment schedules up to 15 years and had relatively low-interest rates.

Question 15: How do homeowners qualify for insured mortgages?

Answer:

Homes must be appraised but the standards of approval were inherently racist through redlining practices

Question 16: What are the challenges of addressing de jure segregation?

Answer:

1.African Americans face more than segregation but also income stagnation, blocked mobility

• Whites are fearful of competition and rejection of policies, historically, to integrate society.

• Segregation can give whites an unrealistic belief in their own superiority leading to poorer

performances if they feel less need to challenge themselves.

• Segregation perpetuates itself and continues to exist making it harder to reverse.

Question 17: Legal actions against banks and mortgage companies

Answer:

• countrywide mortgage company- gov't alleged that statistical relationship between race and mortgage

terms were so extreme that top bank officials must've been aware of racial motivation

• WellsFargo, Memphis, TN- employees referred to subprime loans as 'ghetto loans' and supervisors

instructed staff to market and target solicitation to African American zipcodes

• Cleveland 2008 sued # of subprime lenders- Bank of America, Citicorp, WellsFargo. Lawsuit alleged

institutions shouldn't have marketed any subprime loans in Clevelands depressed black neighborhoods b/c lenders knew that high poverty, unemployment rates, and flat property values in those communities would preclude borrowers from capturing sufficient appreciation to afford the higher adjustable rates they faced.

Question 18: Why is sales tax more burdensome for lower-income consumers?

Answer:

Disparate impacts are unavoidable but to minimize the impacts by exempting grocery purchases from sales tax can elevate some costs to lower-income consumers.