Blacks and Hispanics are more likely to get a high-cost, subprime mortgage when buying a home than whites, a major factor in a wave of foreclosures in poor, often black neighborhoods nationwide as a housing slowdown puts millions of “subprime” borrowers at risk of default.
In six major U.S. cities, black borrowers were 3.8 times more likely than whites to receive a higher-cost home loan, and Hispanic borrowers were 3.6 times more likely. In greater Boston, for example, 71 percent of blacks earning above $153,000 in 2005 took out mortgages with high interest rates, compared to just 9.4 percent of whites, while about 70 percent of black and Hispanic borrowers with incomes between $92,000 and $152,000 received high-interest rate home loans, compared to 17 percent for whites.
When the property market was strong, predatory lenders and unscrupulous brokers promised borrowers that rising prices meant they could easily remortgage their properties to keep up with payments.
This year, estimates are some 1.5 million homeowners will face foreclosure.
In six major U.S. cities, black borrowers were 3.8 times more likely than whites to receive a higher-cost home loan, and Hispanic borrowers were 3.6 times more likely. In greater Boston, for example, 71 percent of blacks earning above $153,000 in 2005 took out mortgages with high interest rates, compared to just 9.4 percent of whites, while about 70 percent of black and Hispanic borrowers with incomes between $92,000 and $152,000 received high-interest rate home loans, compared to 17 percent for whites.
When the property market was strong, predatory lenders and unscrupulous brokers promised borrowers that rising prices meant they could easily remortgage their properties to keep up with payments.
This year, estimates are some 1.5 million homeowners will face foreclosure.