By Sheryl Harris

July 25, 2012



Black and Latino homebuyers nationwide are significantly more likely to wind up with government-backed mortgages than white homebuyers, according to the Woodstock Institute’s latest look at disparities in mortgage lending.

In Cleveland, the study found, 85 percent of blacks and 65 percent of Latinos who received home loans in 2010 wound up with government-backed FHA and VA loans, compared to 47 percent of white borrowers.

“You just look at the data, you see the same pattern across the country,” said Charles “Chip” Bromley, director of the Ohio Fair Lending Coalition, which participated in the study of seven metropolitan areas.

Home loans offered through the Federal Housing Administration and Veterans Administration require smaller down payments than conventional loans but can be more expensive and can take longer for approval.

Nationwide, three out every four African-American borrowers wound up with government-backed home loans, and 67 percent of loans issued in communities of color were government backed.

That raises questions about whether lenders are “redlining,” which means refusing to lend in certain neighborhoods, or steering minority borrowers into more expensive loans, the study said. Both are illegal.

Definitive answers, though, are hard to come by, both because of the limited data the government collects under the Home Mortgage Disclosure Act and because the government aggregates the data.

The report’s authors urged the Consumer Financial Protection Bureau to speed up its work to collect and release more detailed home loan data.


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