Homeowners Given Bad Mortgages?

A New York Times article this week discussed research that shows African Americans and Hispanics are more likely to get higher cost loans. Though the conclusions are somewhat controversial (is it discrimination, redlining, a function of aggressive marketing, or something else?) it’s not the first time this disparity has been raised. In fact, you’ll find a variety of studies here that show that women, African Americans, and Hispanics are more likely to get a higher cost loan, when better loans are available.

Our data, gathered from hundreds of subprime programs monitored over the past three years, go even further: we have found that most consumers who got adjustable rate subprime loans (ARMs) could have qualified for a comparable or even better fixed rate loan. However, either they or their loan officer did not know a less risky loan was available. This means that a significant part of the current subprime mess could have been avoided, had the search tool we make available at FreeRateSearch.com been available to consumers then.

We wish it could have been rolled out sooner. But even now, we find that home loan shoppers are sometimes skeptical of our system, having had poor online mortgage shopping experiences in the past. The fact is, though, if you know the best par loan rates available for you, it puts you in an excellent position to avoid being misled and overcharged.

You can read a good post on the New York Times article at Creditbloggers.com.