Study: Racial inconsistency in subprime loans

A New York University study found that black and Latino home buyers in New York were more likely to get subprime mortgages than white buyers with similar incomes. The disadvantage in this discrepancy is that subprime loans typically contain high interest charges that are very difficult for borrowers to pay off. In addition, there is a worry over a global economic slowdown due to the excess of subprime borrowers in the U.S.

Hence, Latino families trying to achieve the “American dream” find themselves heavily in debt and with their homes in foreclosure:

Like other groups, Hispanics see home ownership as progress. The equity that comes with a home is a means of building wealth. It’s leverage for starting a small business, financing an education and building a stake in a community.

While market sticklers blame the subprime crisis on bad financial decisions, allowing the market to act as if it functions outside of racism would be absurd.

Mortgage Bankers Association economist Jay Brinkmann claimed that the analysis did not have enough information, yet previous studies seem to strongly support the conclusions of the NYU report.

Sources- New York Times – City Room, WNBC, The Latin Americanist, UPI, El Diario/La Prensa, Washington Post, CNNMoney.com

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