Blacks saddled with high-interest loans: study shows disparity in subprime lending.African Americans are more likely to receive subprime mortgage loans than Latinos and much more likely to receive them than whites. After analyzing lending data, the Association of Community Organizations for Reform Now “ACORN” redirects here. For the fruit of the oak tree, see Acorn. “ACORN” redirects here. For the social classification, see ACORN (demographics). ACORN, the Association of Community Organizations for Reform Now found that 32.4% of blacks received high-interest loans to purchase homes in 2004. That number was drastically different for Latinos and whites--20.3% and 8.7%, respectively. High-cost mortgages, defined as loans that originated at an annual percentage rate three points above Treasury rates, had APRs ranging from 7.67% to 8.54% in 2004. For the first time last year, the Home Mortgage Disclosure Act mandated that financial institutions report details about their mortgage lending transactions to the Federal Financial Institutions Examination Council The Federal Financial Institutions Examination Council, or FFIEC, is a formal interagency body of the United States government empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of , an interagency in·ter·a·gen·cy adj. Involving or representing two or more agencies, especially government agencies. body regulated by the Federal Reserve. More than 8,853 financial institutions disclosed information about their lending practices, and the results are alarming. In Miami, Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. dispersed high-cost loans to 11.2% of blacks, compared to 1.2% of whites, reports ACORN. In Philadelphia, African Americans are 7.8 times more likely to receive high-interest loans than whites; in Chicago, 7.2 times more likely; and 6 times more likely in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Washington. D.C. In some cases, minority borrowers with good credit are "steered" toward high-cost loans more appropriate for borrowers with low credit scores. But the report also suggests that discrimination is not always the factor; minorities are far more likely than whites to borrow from companies that specialize in high-rate loans. In the past, information on subprime loans flew below ACORN's radar. The new HMDA HMDA Hexamethylene Diamine (chemistry) HMDA Hitchhiker Motorized Door Assembly HMDA High Mobility DGM Assemblage HMDA Home Mortgage Disclosure Act of 1974 data accounts for all high-cost loans, regardless of the lenders' mix of offerings. Not only did HMDA reporting make compiling mortgage data more accurate, says ACORN Fair Housing Director Valerie Coffin, "It also made it clearer that the disparities were greater than was previously understood." Coffin says lenders need to ensure that every borrower gets the lowest-cost loan for which they qualify. Among lending institutions, Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. had the best record; Wells Fargo performed the worst. [GRAPHIC OMITTED] |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion