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Fed: Minorities got worst of boom and bust

Failed lenders were more likely to charge high rates
Published on Sep 12, 2008

A Federal Reserve Board analysis of millions of home loans suggests minorities were more likely to pay high interest rates when they took out a loan during the housing boom, and then had a harder time getting a loan when the boom turned to bust. The Fed study reveals that, as a group, nearly 200 independent mortgage companies that failed last year were much more likely to make higher-priced loans to minorities, and that minority communities have been hit hardest by cutbacks in lending during the credit crunch.The National Community Reinvestment Coalition said the study demonstrated lax regulations contributed to the boom-bust cycle that sent housing markets and then the economy into a tailspin. NCRC noted that all but two of the 169 lenders that failed in 2007 were independent mortgage companies that are more loosely regulated than depository institutions."It is clear from the Federal Reserve report that stronger regulatory oversight could have prevented much of the damage to the ...

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