Unequal Burden: Income and Racial Disparities in Subprime Lending in America (April 2000, 15 p.)
HUD has released a study showing that the number
of subprime home loans is skyrocketing in predominantly black neighborhoods and low-income
neighborhoods. While expanded access to credit is critical, there is growing evidence that some
lenders may be engaged in predatory lending that is making homeownership far more costly for blacks
and poor families than for whites and middle-class families.
The study - Unequal Burden: Income and Racial Disparities in Subprime Lending in
America - at the start of the meeting of a new Predatory Lending Task Force, and announced that
Treasury Secretary Lawrence H. Summers will join him as co-chair of the Task Force.
Key findings of the Department of Housing and Urban Development analysis show that: 1) From 1993
to 1998, the number of subprime refinancing loans increased ten-fold. 2) Subprime loans are three
times more likely in low income neighborhoods than in high-income neighborhoods. 3) Subprime loans
are five times more likely in black neighborhoods than in white neighborhoods. 4) Homeowners in
high-income black areas are twice as likely as homeowners in low-income white areas to have