Sue Kirchhoff, USA Today, Sept. 14
WASHINGTON — Minorities are far more likely than whites to take out higher-priced loans to buy or refinance a home and are denied loans more often.
The differences can be explained largely — but not fully — by such factors as income, the Federal Reserve said Tuesday.
In an examination of 2004 mortgage data, Fed economists found that the average incidence of higher-priced home-purchase loans was 32.4% among African-Americans, 20.3% among Hispanic whites and 8.7% for non-Hispanic whites.
The Fed also examined more complete data from eight subprime lenders — institutions that make higher-priced loans to borrowers with flawed credit. It found that in some cases the racial differences were fully accounted for, but in others questions remained.
Overall, the researchers found about 2% of the 8,853 lenders studied had a statistically significant difference in lending to black and Hispanic borrowers as compared with whites. They didn’t say what percentage of overall loans, as opposed to lenders, fell into that category.