An article was published yesterday from Mortgage Daily News in regards to NAACP Sub prime Discrimination Suit. The NAACP is calling the lenders predatory targetingof African Americans Two reports support this claim, one is released by CLC (Center for Responsible Lending) stated that "African-Americans were more likely - 31 to 34 percent - to be issued more expensive sub prime loans than were Caucasians with equal creditworthiness and credit risk". The other was released by NCRC (National Community Reinvestment Coalition) published a study that stated "Lenders made high-cost sub prime loans to higher-qualified African-Americans 54 percent of the time compared to 23 percent of the time to Caucasians, even when the latter group was less qualified".
Here are the lenders named:
- Ameriquest Mortgage Company
- Fremont Investment & Loan
- Option One Mortgage Corporation
- WMC Mortgage Corporation
- Long Beach Mortgage Company
- Citigroup, Inc.
- BNC Mortgage, Inc.
- Accredited Home Lenders, Inc.
- Bear Sterns Residential Mortgage Corporation
- First Franklin Financial Corporation
- HSBC Finance Corporation
- Washington Mutual, Inc.
Here is a copy of the lawsuit from the NAACP.
With my career mainly with business in Atlanta, GA, the racial makeup is 59.39% Black, 33.22% White and 6.49% Hispanic (facts from From Wikipedia). I work with clients from all types of backgrounds and ethnicity. I hope this lawsuit does not give the mortgage industry another bad stereotype. While this topic maybe sensitive to many, it seems we have not seen the end of the sub prime market fallout. I will follow this with extreme interest...
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