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Different interest rates for different racial groups?

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Mortgage Professional America | 24 Aug 2015, 06:30 AM Agree 0
A recent study suggests one minority group pays higher mortgage rates
  • JCR | | 24 Aug 2015, 09:35 AM Agree 0
    And no mention of the credit score and LTV correlations to interest rates???
  • AshTX | | 24 Aug 2015, 09:56 AM Agree 0
    My thoughts exactly JCR. I hope the study controlled for any variances in credit score.
  • Martin | | 24 Aug 2015, 10:06 AM Agree 0
    So what is the credit score, LTV, DTI?
  • | | 24 Aug 2015, 10:22 AM Agree 0
    This all means that Black Loans Matter.
  • dpinh | | 24 Aug 2015, 10:51 AM Agree 0
    Could it also be that the rate is higher to absorb some of the closing costs? If this is happening to low income individuals perhaps they do not have adequate funds to close unless some of the fees are absorbed. We need to see the whole picture.
  • AshTX | | 24 Aug 2015, 11:19 AM Agree 0
    Another great point!
  • Peavey | | 24 Aug 2015, 01:08 PM Agree 0
    So when did race become an item on a mortgage application?
  • nnw | | 24 Aug 2015, 07:00 PM Agree 0
    I dare them to reveal the fico score data on their findings, now that's a giant can of worms.
  • BigLender | | 25 Aug 2015, 06:42 AM Agree 0
    Race has been an issue on a mortgage application...HMDA, essentially for all fairness of homeowners. Let's see all the stats FSU...Higher Rate=a magnitude of multiple factors such as Lender Credits (Professor would need to cough up the HUD-1 for all researched borrowers; highly unlikely), and then there is the factors of LTV, FICO, DTI and all LLPA pricing adjustments aside from any individual lender overlays, all of which affect the overall rate.
    ...from my 18 years of experience in this biz I do find that most lower income FTHB (First Time Home Buyers) who are purchasing a home with minimal down payment typically do seek lenders credit to assist with their Closing costs, especially since the days of Seller Credits such as Nehemiah and HART have long been past us. Most uneducated FTHB try to also push their DTI as high as it can go due to lack of income and needing to be competitive by qualifying for higher mortgage amounts. Also, 3.75% which is talked about in this article, especially in this market, sounds most likely to be referencing FHA Loans.

    It would appear that FSU would be specificly talking about National Retail Lenders; as regulation forces Brokers into comp plans which would have no bearing any specific demographic or ethnic group for that matter. Sounds like the researcher just researched random HMDA Data and years of school on mortgage apps.

    Sounds to me that the Brokers of the country are finally getting it right!
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