Report: Minorities Pay More for Florida Mortgage Loans
A high number of home loans and refinancings were made in the South Florida housing market in 2006 at above-market interest rates - and minority borrowers were more likely to have high-cost loans than non-minorities.So says a study by the Association of Community Organizations for Reform Now (ACORN).
In Broward County, 42 percent of all Florida refinance loans and 34 percent of all home purchase loans made in 2006 were high cost - defined as loans originated with an annual percentage rate of at least three points above the comparable rate on U.S. Treasury securities during 2006.
Among blacks, 63 percent of refinance loans and 66 percent of home purchase loans in 2006 were high cost - meaning blacks were 1.7 times and 2.3 times more likely to receive a high-cost loan than whites.
Among Latinos, 51 percent of refinance loans and 40 percent of home purchase loans in 2006 were high-cost. Latinos were 1.3 times and 1.4 times more likely to receive high cost loans that whites.
The report listed similar findings for Miami-Dade County.
In that region, 37 percent of all refinance loans and 46 percent of all home purchase loans were high cost.
Fifty-three percent of the Florida mortgage refinancing and 64 percent of the home purchase loans issued to blacks were high cost. Blacks were 2 times and 2.4 times more likely to receive a high-cost loan than whites.
Among Latinos, 37 percent of refinance loans and 50 percent of the home purchase loans issued in 2006 were high cost. That makes Latinos in that area 1.4 times and 1.9 times more likely to receive a high-cost loan than whites.
In Palm Beach County, 49 percent of all refinancing loans and 42 percent of all home purchase loans in 2006 were high cost. Among blacks, 70 percent of refinance loans and 75 percent of home purchase loans were high cost. Blacks were 1.7 times and 2.4 times more likely to receive high-cost loans than whites.
Among Latinos, 71 percent of refinance loans and 69 percent of home purchase loans were high cost. Latinos were 1.8 times and 2.2 times more likely to receive high-cost loans than whites.
The report showed the disparity persisted across income levels.
In Palm Beach County, for example, minority homebuyers with higher incomes were more likely to receive a high-cost Florida mortgage loan than white homebuyers with lower incomes.
Miami ACORN director Jenny Lawson said that while the 2006 numbers are similar to what the organization has seen in the past, the scope of the current Florida housing crisis means minority borrowers will be hit extremely hard.
“The race discrimination, it hasn’t gotten any better,” she said. “The impact, we are feeling it across the board, but communities of color are feeling the impact harder.”
