*A new study by the National Community Reinvestment Coalition (NCRC) charges that African American and Hispanic borrowers have been targeted with risky subprime loans by financial institutions nationwide.
As a result, says the study, minority home owners were more likely to go into foreclosure. According to the NCRC, the steering of minorities into the risky, high-cost subprime loans “contained a clear racial component not explained by objective underwriting criteria.”
“Private market players, from brokers to mortgage lenders to Wall Street, created a lending pipeline typified by risky, abusive and unfair practices,” said John Taylor, president and CEO of NCRC. “It is a shameful condition that borrowing while black or Latino remains a hazard in this country. Without strong regard for the risky characteristics of the products they were peddling, lenders and Wall Street chose short-term profits over fair and prudent lending. These risky products were targeted to certain communities at first, and then spread elsewhere.”