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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  April 2, 2009  |   Subprime Study: Treatment of Minorities Equitable
A study of information recorded by lenders under the Home Mortgage Disclosure Act indicated that, contrary to some previous studies, minorities and women didn’t receive higher levels of subprime mortgages nor did their interest subsequently reset to higher levels.

The study concluded: “If any pricing differential exists, minority borrowers appear to pay slightly lower rates.”

Authors of the research were Joseph Tracy, director of research at the New York Fed; Andrew Haughwout, head of microeconomics and regional studies at the New York Fed; and Christopher Mayer, a professor of real estate finance and economics and vice dean of the Columbia University Business School.

Critics of the findings said there was no information available about whether minority borrowers were charged higher upfront costs or whether they might have qualified for less-expensive financing.

“If you don’t have information on two of the biggest areas of abuse, you have to wonder how definitive a report like this is,” said Sarah Ludwig, co-director of the Neighborhood Economic Development Advocacy Project in New York and a former member of the Fed’s Consumer Advisory Council.

Source: Bloomberg (04/02/2009)

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