Industry News

Feds probe mortgage lenders for possible racial discrimination

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African Americans and Hispanics pay higher interest rates on mortgage loans than whites, and cases that can't be explained by borrower-related factors are being probed, a federal report said. A Federal Reserve Board analysis of 2004 home-lending data shows that even after adjusting for factors such as income level that could raise mortgage interest rates, blacks are still nearly twice as likely as whites to be given high-cost loans. Regulatory agencies, including Housing and Urban Development and the Fed itself, are investigating, a spokeswoman at the Federal Reserve confirmed to Inman News. The mortgage industry is under a spotlight for alleged discriminatory lending practices. The 30-year-old Home Mortgage Disclosure Act, or HMDA, which comes under Federal Reserve purview, was upgraded for 2004, requiring lenders to report new categories of data, ostensibly to uncover disparate, or discriminatory, behaviors. Researchers at the Federal Reserve, who analyzed the data lenders wer...