Subprime in Black and White

Subprime in Black and White

Editorial
Subprime in Black and White

Published: October 17, 2007
Evidence is mounting that during the housing boom, black and Hispanic borrowers were far more likely to be steered into high-cost subprime loans than other borrowers.

Excerpts:

Evidence is mounting that during the housing boom, black and Hispanic borrowers were far more likely to be steered into high-cost subprime loans than other borrowers, even after controlling for factors such as income, loan size and property location.

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Neighborhoods where subprime borrowers are concentrated are the same neighborhoods that are now experiencing high rates of default and foreclosure. That’s because many subprime loans were not designed to be affordable over the long term, but rather to be refinanced before their initial teaser rates rose. That often hasn’t been possible as home values have dropped and credit standards have tightened, leaving borrowers stuck in loans that have become unmanageable.

Comment: A good read. Perhaps not as clear as it could have been is the fact that credit worthiness is based on credit history and not on income or assets. When a potential creditor sees any of us ... all they see is credit history. By the way ... be sure to check your own credit history annually. A link to the free annual credit report is below right in the navigation pane for links!