Unfair lending finally getting some well-deserved attention
Good, but what took so long?
That's my take on the Obama Administration's launch of a new Justice Department unit that will look at unfair lending practices that too often appear to have targeted minority communities.
Obviously, this isn't the kind of thing the Bush Administration was particularly interested in exploring.
But then again, why it took the new Obama Administration roughly a year to launch its new Fair Lending unit is another question altogether.
Guess it's better late than never.
There's clearly a lot of explore here. Minority homeowners in the Boston area and across the country were far more likely during the bubble years to end up with high-cost subprime loans than were their white counterparts.
Well more than half of black and Latino home buyers in the Boston area who obtained loans wound up with subprime specials, compared to just 13 percent of white borrowers, a 2007 study by the University of Massachusetts Boston found. The survey looked at loans to Boston area home buyers by seven financial institutions.
Such loans, with their sky-high interest rates and crazy balloon payments, helped launch a foreclosure crisis of historic proportions that has dragged the nation's economy down with it.
There's also evidence that many borrowers who could have qualified for prime mortgages were instead steered into subprime loans, which were far more lucrative for lenders and mortgage brokers.
The new Justice Department unit now has 38 investigations going now, its chief, Thomas Perez, tells the Associated Press.
The unit is looking at both cases where lenders unfairly denied home loans as well as other instances where financial institutions may have pushed minority borrowers into subprime loans.
And the new Justice Department unit is examining whether discrimination is ongoing as minority borrowers seek help from lenders to modify or refinance their mortgages.
It will be interesting to see what the feds turn up.
