Minorities May Pay More for Mortgages

A study conducted in Jackson, Mississippi found that minorities in the area paid more on average for a mortgage than white homeowners do. The community action group is pointing to discrimination, while others are saying the findings are misleading. The problem is more prevalent in Jackson than in other areas, according to the study; the findings showed that more than 72% of high cost loan in the city were for minorities. Black borrowers were the worst affected, paying almost double the rate that a white borrower would receive.\r\n

In response, though, the data from the Home Mortgage Disclosure Act points out that high cost loans are associated with high-risk borrowers. Credit scores, income and financial reserves are all factors in obtaining low mortgage rates; the study consisted of 220,000 low income families, making the study skewed according to some. Mortgage professionals also point out that Jackson has the largest incidents of high cost loans regardless of race, making the data even more biased. Industry watchdogs claim that the loans are not a matter of discrimination, but a matter of business in a high-risk setting.\r\n