At a closing, there is a piece of paper that flies by the borrower that says something like, “Disclosure: lenders may not discriminate in regard to race, gender, national origin...” Well, it is becoming pretty clear that there was a lot of discrimination going on.
For me, the systematic targeting of minorities and women for subprime loans speaks to larger societal issues. Predators know where to go to find people who have good incomes who still agree to subprime loans. Remember that going into a subprime loan costs more than going into a conventional loan. So, at the very least, women and minorities have been overcharged for their loans. In both cases, the research shows it is not just lower-income borrowers caught in this trap.
Back in July, it was minorities:
“70 percent of African-Americans and Latino borrowers with incomes between $92,000 and $152,000 bought homes with subprime mortgages in Greater Boston, compared with just 16 percent of whites.”
Today, it’s women:
“Women borrowers are overrepresented in the subprime lending market according to studies done by both the Consumer Federation of America and the National Community Reinvestment Coalition. Across the economic spectrum, women receive less favorable terms than similarly situated men on home purchase, refinance, and home improvement loans. The studies also show that the gap between women and men receiving subprime loans actually increases as women's income increases.” [Emphasis mine]
Holy cow, again. Racism and sexism is alive and well and was living at a lender near you. Clearly the thieves out there thought women and minorities made better targets. There are good people in lending and bad. I am happy to see the bad ones gone. I hope they rot in "heck."
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