Racial lending?
July 31, 2008 | industry, industry critics, personal finance | Comments (0)This new study by the National Community Reinvestment Coalition claims minorities are at higher risk to be the recipients of high-cost mortgages and other types of loans. To their credit, the authors didn’t make the charge that lenders “target” by race. From the report:
Lending disparities for African-Americans and Hispanics also increased significantly as income levels increased. During 2006, middle- and upper-income (MUI) African-Americans were twice or more as likely to receive high-cost loans as MUI whites in 155 of the metro areas analyzed (71.4 percent). Furthermore, MUI Hispanics were twice or more as likely to receive high-cost loans as MUI whites in 45 of the metro areas analyzed (22.5 percent).In comparison, while low- and moderate-income (LMI) minorities are more likely to receive high-cost loans than LMI whites, the disparity was less significant than disparities among MUI borrowers. LMI African-Americans were twice or more as likely to receive high-cost loans as LMI whites in 87 metro areas (47.3 percent). Furthermore, LMI Hispanics were twice or more as likely to receive high-cost loans as LMI whites in 8 metro areas (4.9 percent).
The research needs to go a lot deeper on this issue.
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