Although most people who have lost their homes to foreclosure have been white and in the middle- or upper-income brackets, African-American and Latino families have suffered a disproportionate share of losses, the Center for Responsible Lending (CRL) says in a new report.
The report, titled ‘Lost Ground,’ finds that foreclosure rates for mortgages with prepayment penalties or other predatory terms have been higher than the rates for loan products without such features.
According to the CRL, African Americans and Latinos across the credit score spectrum were more likely to receive a high-cost mortgage with risky features. African Americans and Latinos with a FICO credit score above 600 received a high-cost loan more than three times as often as white borrowers.
The high concentrations of risky mortgages partly explain why African Americans and Latinos have been hit harder by foreclosures than whites with similar incomes, the report adds. According to the CRL, the foreclosure rate for low- and moderate-income African Americans is about 80% higher than that for comparable white households. Foreclosure rates for higher-income Latinos is more than three times that of higher-income whites.