Segregated Mortgages

11:49 pm EST October 14th, 2007 | News | 1 Comment

It continues. Still.

Home buyers in predominantly black and Hispanic neighborhoods in New York City were more likely to get their mortgages last year from a subprime lender than home buyers in white neighborhoods with similar income levels, according to a new analysis of home loan data by researchers at New York University.

The analysis, by N.Y.U.’s Furman Center for Real Estate and Urban Policy, illustrates stark racial differences between the New York City neighborhoods where subprime mortgages — which can come with higher interest rates, fees and penalties — were common and those where they were rare. The 10 neighborhoods with the highest rates of mortgages from subprime lenders had black and Hispanic majorities, and the 10 areas with the lowest rates were mainly non-Hispanic white.

The analysis showed that even when median income levels were comparable, home buyers in minority neighborhoods were more likely to get a loan from a subprime lender.

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One Response to “Segregated Mortgages”

  1. Jay says:
    October 15, 2007 at 9:06 am

    Leave it to the New York Times to stir up crap. An important little paragraph from the article:

    The analysis provides only a limited picture of subprime borrowing in New York City. The data does not include details on borrowers’ assets, down payments or debt loads, all key factors in mortgage lending. And comparing neighborhoods is inexact; the typical borrower in one may differ from a typical borrower in another.

    So right there they basically say the study is worthless, but they’re hyping it anyway.

    That’s not to say there aren’t problems that need to be addressed. But a more careful approach should be taken to see what those problems are. A ‘study’ like this does nothing but get everybody in an uproar and what you have happen is a ‘fix’ that winds up in the long run, hurting more than it helps.