Redlining Still Exists, Manifests in Mortgage Rates

Minorities were far more likely than whites to be given high-cost sub-prime mortgages last year, according to a study to be released today by the Association of Community Organizations for Reform Now, an advocacy group.

Some of these risky loans were given to people who do not have bad credit. Especially minorities were given loans far worse than what they qualified for.

Nationwide, the study found that African American home purchasers were 2.7 times more likely to receive a high-cost loan than white borrowers.  Latinos were 2.3 times more likely to receive sub-prime loans than whites. (This report used a federal definition of high-cost loans as those with an annual percentage rate at least three points above the rate for comparable U.S. Treasury securities.)

For home refinances, high-cost loans were made to African Americans 1.8 times more often and to Latinos 1.4 times more often.

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