18 July 08 - 03:04Vast majority of bad subproime loans went to Minorities ?
3 stories offered as proofWashington Post
NEIGHBORHOODS BEAR THE BRUNT
Are subprime loans targeted at minorities or at minority neighborhoods? Ingrid Gould Ellen, a professor of public policy at New York University, thinks there is evidence it is the latter
an analysis she helped perform for the Furman Center for Real Estate and Urban Policy, where she is a co-director, Ellen drew up lists of the 10 neighborhoods in New York City with the largest number of subprime mortgages and the 10 with the smallest number.
In the neighborhoods with the highest numbers of those loans -- such as University Heights/Fordham, Jamaica and East Flatbush -- subprime loans accounted for nearly half of the mortgages issued.
On average, those 10 neighborhoods were around 5 percent white, 5 percent Asian, 59 percent black and 31 percent Hispanic. The neighborhoods with the smallest numbers of subprime loans, on the other hand, were around 55 percent white, 12 percent Asian, 14 percent black and 19 percent Hispanic.
"Even white home buyers who live in predominantly minority neighborhoods are more likely to get subprime loans," Ellen said. "The racial composition of neighborhoods is a stronger predictor of the rates of subprime loans than the income levels of the neighborhood."
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Cleveland Examiner
African Americans in D.C. bear burden of subprime mortgage crisis, report finds
WASHINGTON (Map, News) - African-Americans in Washington are living on the knife’s edge of the subprime mortgage crisis, a city government study has found.
Nearly seven out of every 10 of the loans in D.C. have gone to African Americans, most of them poor or lower middle class, the city’s Department of Insurance, Securities and Banking report found Monday.
And, experts say, the bill is coming due: Foreclosures in D.C. have doubled between 2005 and 2007 and have continued to rise through the first quarter of 2008. Most of those foreclosures are coming in African-American neighborhoods in Wards 4, 5, 7 and 8.
“It’s going to get worse before it gets better,” said Urban Institute researcher Peter Tatian, whose group contributed to Monday’s report. “I think we need to be concerned.”
Most experts said they weren’t surprised by Monday’s findings but were glad to have an objective look at what many had been hearing anecdotally. People with poor credit or low income used subprime loans to buy homes in the millions and the bonanza floated the American economy for the first part of the century. But the high interest rates and often hidden fees and costs have continued to trap borrowers.
For observers of D.C.’s real estate market, the subprime crisis threatens to blight long-suffering neighborhoods that once seemed ready to crawl out of endemic poverty.
“We knew the implosion was going to impact black and Latino homeowners,” said Aracely Panameno of the Center for Responsible Lending. “We’ve been last in, and first out. It’s really sad.”
D.C. Councilwoman Mary Cheh, D-at large, has introduced a series of bills to attack predatory lending and to give strapped homeowners room to beat back their debt. But “it’s just not enough,” she said.
“We’re left with the people and the communities that are suffering,” Cheh said. “Because people will lose their homes.”
The report’s recommendations include offering financial education for District residents, creating a judicial foreclosure process, and requiring lenders and brokers to determine if the borrower has the ability to repay the loan.
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Brandenberg herald
NAACP protests against subprime loans
By DUANE MARSTELLER
dmarsteller@bradenton.com
MANATEE --Local and national black leaders called on subprime lenders Wednesday to reform their lending practices, contending minorities have been discriminated against.
In a series of events across the country, the National Association for the Advancement of Colored People launched an initiative against subprime and other lenders. The goal: To pressure lenders to make amends for past discriminatory practices and to abolish them altogether.
"Starting today, the NAACP is starting to take action," Edward Bailey, president of the organization's Manatee County branch, said Wednesday. "This is not going to be just a one-time thing."
At rallies from Baltimore to Seattle, NAACP officials cited several studies that said blacks were more likely to receive subprime loans - those with higher interest rates and other costs - than whites.
For example, a 2008 study by the United for a Fair Economy advocacy group found 55 percent of loans to blacks were subprime compared to 17 percent of loans to whites.
A Bradenton Herald study of federal home loan data found similar patterns in Manatee County.
Subprime loans accounted for nearly half of all home loans taken out by Manatee blacks and Hispanics from 2004 to 2006, while it was one in five for whites and non-Hispanics.
The lending industry contends borrowers' credit histories, income and other factors, rather than race, is responsible for the disparity.
The NAACP disagrees and filed a federal class-action suit in California against 17 major subprime lenders last year, accusing them of discriminatory lending practices. The suit contends the lenders targeted blacks for the higher-cost loans based solely on their race.
The lenders have not directly responded to the allegations, but are seeking to have the suit dismissed on various legal grounds, court records show.
Experts said subprime loans, many with adjustable interest rates that are resetting upward, are a driving force behind the record number of foreclosure filings both locally and nationally. No comments No trackbacks
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