By Thomas Adams
July 19, 2012
Some 86 percent of mortgages in Rochester’s minority communities in 2010 were backed by government entities at higher interest rates, the highest percentage among seven cities included in a report released Thursday.
The report, Paying More for the American Dream VI: Racial Disparities in FHA/VA Lending, was compiled by seven community organizations, including the Empire Justice Center in Rochester.
It shows evidence of a two-tiered mortgage market characterized by high rates of government-backed loans made to borrowers in minority communities and to minority borrowers, officials said.
More than 75 percent of home-purchase loans made to black and Latino borrowers in the Rochester area were insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, the report states.
Homeowners in Rochester’s minority communities obtained government-backed refinanced loans more than twice as often as homeowners in predominantly white neighborhoods, the report states. Black homeowners here received refinanced mortgages 2.7 times more than white homeowners.
Black and Latino borrowers in the seven cities accounted for 67 percent of FHS or VA loans, the report states. Borrowers who bought homes in minority neighborhoods received government-backed loans twice as often as borrowers in predominantly white neighborhoods.
Homeowners in minority communities received government-backed refinanced loans more than three times as often as those in predominantly white communities, it states.
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