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Article Excerpt
Lenders charge minority borrowers higher mortgage rates than white borrowers, even when risk factors are the same, according to studies of the latest data collected under the 1975 Home Mortgage Disclosure Act (HMDA), which requires lending institutions to report public loan information.
Last year, for the first time, lenders were required to report details on subprime home loans, which carry higher rates based on the amount of risk represented by a borrower who can't get credit in the prime market.
"Predatory lenders often steer borrowers into subprime loans when the borrowers are actually eligible for prime-rate loans," Edward Kramer, a Cleveland attorney who handles Fair Housing Act cases, wrote in the Spring 2006 issue of the Civil Rights Section newsletter. "A loan becomes predatory when a lender, broker, or home-improvement contractor takes steps to knowingly mislead a borrower; hide loan terms that are highly unfavorable to the borrower; or charge a borrower unreasonable costs, fees, and interest."
A 2005 Federal Reserve...
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