Borrowers have power to derail predatory lenders

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

(This is Part 2 of a two-part series. Read Part 1.) Last week, I made the point that more than 90 percent of home mortgage transactions involved a two-stage process. The first stage, the development of posted prices that are delivered to loan officers and mortgage brokers, is bias-free. The unequal treatment of minorities occurs in stage 2, where posted prices are converted into the final prices paid by borrowers. A sizeable number of loan officers and brokers charge what the market will bear, and minorities end up paying more because they are more vulnerable. Lenders may commit many sins, but I don't believe that discrimination against minorities is one of them. Wholesale lenders have virtually no control over the markups charged by brokers. While loan officers working for retail lenders are employees, lenders cannot eliminate their pricing discretion or control how it is used. They would love to, but any lender that tried it would lose its loan officers and the loans they bring in. ...