A good credit score did not protect Latino and black borrowers

nutmeg · Jan 21, 2012

Quote from jficquette:

I doubt if he had access to that level of information. If he had he wouldn't have written the article.

Imo, using the source of his chart, he based his article on this research paper which states (page 24)

"While a full regression analysis of all underwriting and pricing features is beyond the scope of this
paper, these figures do provide further evidence that minority borrowers were disproportionately
targeted for mortgage products that were inherently more difficult to sustain, which has resulted in
higher foreclosure and serious delinquency rates in communities of color".

http://www.responsiblelending.org/mortgage-lending/research-analysis/Lost-Ground-2011.pdf

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Now with this being said, the above research paper directly conflicts with my previouso link showing results by the NY Fed.reserve.

(The nyfed, I doubt,has any motivation whether we have a "new" consumer protection board)

AAAintheBeltway · Jan 21, 2012

I still don't get it. If borrowers are too stupid to shop around, whose fault is that? Why is it suddenly illegal to charge what the market will bear? It costs a lot more to buy stuff in a ghetto bodega than at a suburban supermarket. Is that illegal too?

The last two mortgages I got, I got them online. The underwriters had no way of knowing what race I am nor did they care.

This whole thing reminds me of a joke about how various media would report the news of an asteroid's imminent destruction of the planet. Washington Post: "Asteroid to destroy planet. Women and minorities to be most affected."

Ricter · Jan 21, 2012

Quote from AAAintheBeltway:

I still don't get it. If borrowers are too stupid to shop around, whose fault is that? Why is it suddenly illegal to charge what the market will bear? It costs a lot more to buy stuff in a ghetto bodega than at a suburban supermarket. Is that illegal too?

The last two mortgages I got, I got them online. The underwriters had no way of knowing what race I am nor did they care.

This whole thing reminds me of a joke about how various media would report the news of an asteroid's imminent destruction of the planet. Washington Post: "Asteroid to destroy planet. Women and minorities to be most affected."

Fraud cancels caveat emptor in the eyes of the law.

Trader666 · Jan 22, 2012

The Federal Reserve Bank of New York MUST be racist. Where are Jesse Jackson and Al Sharpton? :mad:

Quote from nutmeg:

Some observers have argued that minority borrowers and neighborhoods were targeted for
expensive credit in 2004-06, the peak period for subprime lending. To investigate this
claim, we take advantage of a new data set that merges demographic information on
subprime borrowers with information on the mortgages they took out. In a sample of
more than 75,000 adjustable-rate mortgages, we find no evidence of adverse pricing by
race, ethnicity, or gender in either the initial rate or the reset margin. Indeed, if any
pricing differential exists, minority borrowers appear to pay slightly lower rates, as do
those borrowers in Zip codes with a larger percentage of black or Hispanic residents or a
higher unemployment rate. Mortgage rates are also lower in locations that previously had
higher rates of house price appreciation. These results suggest some economies of scale in
subprime lending. Yet there are important caveats: we are unable to measure points and
fees at loan origination, and the data do not indicate whether borrowers might have
qualified for less expensive conforming mortgages.

http://www.newyorkfed.org/research/staff_reports/sr368.pdf

Trader666 · Jan 22, 2012

Because it's always someone else's fault when you're a member of the victim class. Vote democrap, victims, and they'll give you the money you deserve! After all, the rich got there by stealing from the poor anyway. And, they don't even pay their fair share in taxes (despite the fact that the top 5% pay far more in federal income taxes than the bottom 95%). They should pay all taxes. Haven't you learned anything living in Obamaville the last three years?

Quote from Lucrum:

You mean like at gun point?

Why can't stupid people guilty of making stupid decisions simply be held accountable?

Why must we blame someone else and/or they be given a pass just because they're a minority?

nutmeg · Jan 22, 2012

Quote from Trader666:

The Federal Reserve Bank of New York MUST be racist. Where are Jesse Jackson and Al Sharpton?

" ... Jesse Jackson Sr. Blames 'Unenforced Civil Rights' Law For Housing Crisis, Denies His Own Involvement Shaking Down the Banks ..."

Al Sharpton called Obama a "House Negro".(which surprisingly, there's not much on google to explain exactly what is a "house Negro")

And the author of the Op's article thinks Bill Cosby is a Putz.

RCG Trader · Jan 22, 2012

Quote from nutmeg:

" ... Jesse Jackson Sr. Blames 'Unenforced Civil Rights' Law For Housing Crisis, Denies His Own Involvement Shaking Down the Banks ..."

Al Sharpton called Obama a "House Negro".(which surprisingly, there's not much on google to explain exactly what is a "house Negro")

And the author of the Op's article thinks Bill Cosby is a Putz.

A house negro is someone who will vote, or act, against their own ethnic groups best interests. Very similar to a self hating jew, or a n*gger lover.

jficquette · Jan 22, 2012

Quote from trendlover:

They are talking about latino and black people with (the good credit, high income.) So why they are put into higher interest subprime?

http://www.pewhispanic.org/2009/05/12/iv-loans-for-home-purchase-in-2007/

While debt‐to‐income ratios were broadly similar across these demographic groups,
black borrowers had lower credit scores while Asian and Hispanic borrowersâ scores tended to
exceed the overall average. Black borrowers were more likely to have very low FICO scores
(below 560) and less likely to have very high scores (above 719). In light of this, it is perhaps
unsurprising that initial interest rates received by black borrowers averaged approximately 20
basis points higher than the overall average, while Asian and Hispanic borrowersâ rates were
25‐36 basis points lower than average. Margins for 2/28 loans, which is the amount added to
the 6‐month LIBOR rate to determine the adjustable rate in the future, follow a similar pattern,
although the differences are smaller than they are for origination rates.__

RCG Trader · Jan 22, 2012

Quote from Trader666:

Because it's always someone else's fault when you're a member of the victim class. Vote democrap, victims, and they'll give you the money you deserve! After all, the rich got there by stealing from the poor anyway. And, they don't even pay their fair share in taxes (despite the fact that the top 5% pay far more in federal income taxes than the bottom 95%). They should pay all taxes. Haven't you learned anything living in Obamaville the last three years?

tut tut TRADER 666.

You know this argument is spurious. You compare in terms of absolutes, rather than percentages.

Come on 6, you are a smart guy, get your A game out!

RCG Trader · Jan 22, 2012

Quote from Trader666:

The Federal Reserve Bank of New York MUST be racist. Where are Jesse Jackson and Al Sharpton?

Actually, amazingly enuf, it was dubya who decided that lending patterns were racist. He started this whole ball of yarn