The Lenders: Ameriquest, Wells Fargo, Fremont, Option One, WMC Mortgage, Countrywide, Long Beach Mortgage, CitiGroup, BNC Mortgage, Accredited Home Lenders, Encore, First Franklin, HSBC, Washington Mutual
* This lawsuit is designed to stop these lenders from engaging in systematic, institutionalized racism in making home mortgage loans.
* In a 2006 study, the Center for Responsible Lending found that when creditworthiness and credit risk were equal, African-Americans were still 31 percent to 34 percent more likely to receive higher rate, more expensive subprime loans than Caucasians.
* The National Community Reinvestment Coalition revealed that lenders on average made high-cost subprime loans to higher-qualified African-Americans 54% of the time, compared to 23% of the time for Caucasians, even when the Caucasian applicants were less qualified.
* These and other studies demonstrate that African-American homeowners are paying higher mortgage interest rates than their Caucasian counterparts.
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7 comments:
Pred-A-Tory. Or is it?
http://doic.net
"This lawsuit is designed to stop these lenders from engaging in systematic, institutionalized racism in making home mortgage loans."
I think NAACP is going too far with this.
How much more can they take. I mean after all no body forced the people getting the loan.
This is for the person who calls him or herself Portland Homes. Don't let ignorence rule your brain.
It is predatory when a lender charges a higher interest rate to a person of another race, gender, or national origin when their credit score, credit history, and credit worthiness is equal or better than their white customers'.
Mortgage rates charged to borrowers are mostly determined by how greedy the mortgage broker is. It would be interesting to compare the above racial inequality statistics with the races of the originators. How many people trust their own race because of color and end up being taken advantage of?
This Housing Crisis is a fault of all involved, from the Wall St. financial management companies to the consumer. Although the NAACP are following the money, I believe it is only a slice of the whole pie. I commend them for their effort, but must criticize their lack of study into the full story. A full break down of what happened is at http://greedandhaphazardness.blogspot.com/
And how do you think this bias was implemented? Loans are priced off matrices that do not reflect the borrowers race or sex. Underwitiers never see the borrower, so how are they going to be biased. Yes race information is gathered (Because the Government requires it) but it is NOT used in underwriting. If there is higher pricing I suspect it is becasue of lower FICO scores or income or collateral values, all of which are beyond the control of the lender. What I'd like to see is this so called data that reflect systemic bias. I suspect the result is coincidental and not caused by lending bias. These borrowers are not all the same and I bet they are not directly comparable.
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