Abogados de Inmigracion

Lenders say they charge more because African-Americans and Latinos tend to have shakier credit histories, which makes lending to them riskier. But that explanation is simply wrong, the Center found in its groundbreaking new research.

The most extensive study of its kind shows that even after controlling for differences such as credit scores and the amount of the down payment, African-Americans and Latinos still wind up with a disproportionate share of expensive loans.

Examining 50,000 subprime loans, the Center's researchers found these groups were almost a third more likely to get a high-priced loan than white borrowers with the same credit profile.

The findings show that decades of work by the civil rights movement to bring fairness and opportunity to all homebuyers is still unfinished.

In light of our findings, the Center urges the subcommittee to:

* Put controls on the pervasive practice of yield spread premiums, the fees lenders pay to brokers and that rise with the interest rate of the mortgage. Often these fees are nothing more than a polite name for a kickback from a lender to a mortgage broker for steering unsophisticated borrowers into higher-interest-rate loans. These kickbacks, many experts say, are a big reason why the statistics the federal government gathers each year under the Home Mortgage Disclosure Act, or HMDA, show that African-Americans and Latinos wind up in higher-interest-rate loans far out of proportion to their share of the population.

* The federal government should require mortgage brokers to act in the best interests of their customers, which the government does not now do.

* Make brokers and lenders disclose clearly that borrowers are being charged a higher interest rate than they qualify for - and how much the broker is being paid for this.

* Give the government the laws and the money to enforce these rules effectively.