By: Scott B. Riddle, Esq.
Today’s (11/4/07) AJC has an article by Carrie Teegardin entitled "Blacks Dominate Subprime Loans." Some highlights –
Black Atlantans of all income groups were much more likely than whites to take out high-interest "subprime" mortgages when buying a home, making them more vulnerable in the ongoing mortgage meltdown.
Nearly half of blacks who bought a house in 2005 or 2006 ended up with a high-interest mortgage, compared with 13 percent of white home buyers, according to an Atlanta Journal-Constitution analysis of federal mortgage data.
The disparity was striking, even in a comparison of home buyers with similar incomes. Among black home buyers making more than $100,000 a year, 41 percent got a subprime mortgage, compared with 7 percent of whites in the same income category. …
Many experts say that differences in credit score are clearly not the end of the story. "It doesn’t explain all of it, or even most of it," said Dan Immergluck, a Georgia Tech professor who is an expert on mortgage lending. Immergluck said the heart of the problem lies in which lenders minority borrowers turn to. He said subprime lenders tend to market heavily in minority neighborhoods. …
William J. Brennan Jr., a 39-year veteran attorney at Atlanta Legal Aid who focuses on mortgage lending issues, said he has reviewed case after case in which blacks were aggressively targeted for the worst loans on the market. Often, he said, subprime borrowers ended up losing the equity in their homes that they worked years to accumulate.