The data have been accumulating for a while now: Blacks and Hispanics are far more likely to get trapped in high-priced mortgages than are whites. But lenders always had a ready response: the real reason loan rates are higher for blacks and Hispanics is their low credit scores, their low incomes, etc. In other words, the high-priced mortgages are correctly priced for risk. The Center for Responsible Lending has now completed a powerful study to test the lenders’ excuses. What did they find? Race matters. When they control for all the other factors, African Americans and Hispanics are about a third more likely to end up with higher rate loans than their white counterparts. In other words, the fact of being black or Hispanic costs a potential homeowner big time.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1250082