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Although racial bias happens in the lending industry, I doubt that it is as big of an issue as the Center for Responsible Lending makes it out to be.  Every few years there are studies that come out that state minorities are being oppressed by lenders, and then someone digs into the numbers and finds out they have been skewed by the researchers.

And do not tell me a group called the Center for Responsible Lending does not have an agenda. If the numbers had come out showing that all was okay, would they have put out a press release stating this? I doubt it. So read the article, take it with a grain of salt, and remember that there is always a motivation.

Because every mortgage broker I know cares about one color when getting a loan done, green. They do not want to risk losing a client just so they can discriminate against them.

According to the Center for Responsible Lending, “African-American borrowers with prepayment penalties on their subprime home loans were 6 percent to 34 percent more likely to receive a higher-rate loan than if they had been white borrowers with similar qualifications.”
The news was even worse for Latino borrowers, who were “29 percent to 142 percent more likely to receive a higher-rate loan than if they had been non-Latino and white.”
In both cases, the numbers varied depending on the type of interest rate (fixed or adjustable) and the purpose (refinance or purchase) of the loan.
Prepayment penalties in particular were a problem for African Americans.
These require a borrower to pay a penalty if he or she pays off the mortgage loan early. The penalty might be a percentage of the outstanding balance or a certain number of months of interest. They are associated with subprime loans because credit-impaired borrowers are considered a risk.
Prepayment penalties punish subprime borrowers who improve their credit ratings and attempt to refinance to get a lower cost for their loans. via Bankrate.com.

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1. SubPrime Market Melting As New Century Faces Bankruptcy
2. LIBOR Not Treasury Rates Hurting SubPrime Borrowers
3. Fannie Mae, Freddie Mac developing HomeStay Loan Program For Subprime Borrowers in Difficulty
4. Subprime Meltdown Report: Atlanta’s SouthStar Funding Shuts Doors
5. Wachovia Offers No Prepayment Penalty on Pick A Pay Loans