Blacks and Latinos Steered to Government-Backed Loans: Report (American Banker)

By Kate Berry

July 24, 2012

 

Black and Latino borrowers received government-backed loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs significantly more often than white borrowers, raising concerns about redlining, a new study has found.

 

The 29-page report, "Paying More for the American Dream," which the California Reinvestment Coalition released Tuesday, used Home Mortgage Disclosure Act data to analyze lending patterns in seven cities: Boston, Charlotte, Chicago, Cleveland, Los Angeles, New York City and Rochester, N.Y.

 

The report found a pattern of two-tiered lending in which borrowers in communities of color received more government-backed loans and disproportionately fewer conventional mortgages than white borrowers. Eighty-five percent of black borrowers in Cleveland received FHA or VA loans compared to 47% of white borrowers.

 

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