Lee condemns
bias in mortgage lending
From
the Globe Business Desk
Anew
report outlining disparities in mortgage lending
practices among racial minorities has been
presented to civil rights leaders and black
members of Congress.
Congresswoman Barbara Lee (D-Oakland)
joined Congressman Melvin Watt (D-North Carolina), the Center for Responsible
Lending and members of the Congressional Black Caucus (CBC) and Congressional
Hispanic Caucus (CHC) recently to discuss the report. It that found that African
Americans and Latinos are 30 percent more likely than whites to be victims
of predatory lending.
Banks have often denied charges that they engage in predatory
lending. Lenders note that they charge higher interest rates to customers with
poor credit histories because they are viewed as greater credit risks. Often
times they are minorities.
Other studies have found that middle and upper-middle
class blacks are also the victims of loan bias compared to whites in similar
income groups.
“This report makes it clear that minority communities continue
to be the target of predatory lenders who are effectively stealing their equity,” said
Lee. “You should not pay more for a loan because of the color of your skin,
yet that is exactly what is happening. This is an example of institutional racism
in its most glaring form.”
The report by the nonprofit, non-partisan Center
for Responsible Lending found that, even after accounting for factors such as
credit scores and other risk factors, Latinos are 2.3 times more likely and African
Americans are 3.7 times more likely to receive a high cost subprime loan than
their white counterparts.
The report is based on an analysis of information collected
under the Home Mortgage Disclosure Act (HMDA) and is available online at www.responsiblelending.
org/reports/HMDA2006. cfm.
“Ending these discriminatory practices is a
key first step to closing the homeownership and wealth gap and breaking the cycle
of disparities,” said Lee.
Civil rights leaders, including Jesse Jackson,
have been urging more blacks to become homeowners in order to build wealth through
equity.
Nationwide, only 45 percent of blacks are homeowners, compared to 48
percent of Hispanics and 75 percent of whites.
