Minorities and Subprime Mortgages
October 18th, 2007
One recent study, by New York University’s Furman Center, found that the 10 neighborhoods in the city with the highest concentration of subprime mortgages had black and hispanic majorities, while the 10 neighborhoods with the lowest number were mostly white. Subprime mortgages – which are at the root of the foreclosure crisis and have high interest rates that can escalate unexpectedly and include steep fees and payment penalties – are generally directed towards borrowers with shaky credit or limited income.
But research by the New York Times found that higher income level black and hispanic borrowers with good credit were still very likely to be steered towards subprime loans.
With all this in mind, the Times editorialized that, in order to find out whether or not subprime lenders have been discriminating against minorities, Congress should force them to disclose their risk profiles of borrowers.
Recent data from PropertyShark.com showed growth in foreclosures around the city to be slowing, leading a couple blogs to say that things are not so bad for the city as a whole. That may be true, but apparently only for white New Yorkers.By Mike Muller on October 18, 2007, 8:18 am
In category: Demographics, Economy, Housing | 5 Comments »