Hispanics vulnerable to predatory lending, NCLR says
Published September 1, 2005 | September 2005 issue
In a first-of-its-kind report, the National Council of La Raza (NCLR) confirms longstanding concerns that many Hispanic homebuyers are steered toward unnecessarily expensive mortgage products. Jeopardizing Hispanic Homeownership: Predatory Practices in the Homebuying Market is the first comprehensive analysis of lending practices and mortgage products that are targeted at Hispanic homebuyers. According to the report, many of these practices have questionable features, such as extremely high interest rates, and fall under the loosely defined category of predatory lending.
NCLR's analysis reveals that Hispanics are twice as likely as whites to finance their homes with the most expensive mortgage products. Hispanics are less likely to refinance than other homeowners, and are more likely to use an expensive product if they do. The report also finds that nearly 4 out of 5 Hispanic homebuyers obtain mortgages through commission-based mortgage brokers. While the majority of such brokers are legitimate, their industry has inconsistent licensing requirements and operates under limited federal oversight, opening the process to abuse by unscrupulous individuals.
To access the report, visit www.nclr.org/section/publications.