Banking Law
Mortgage Bias Investigated
The U.S. Justice Department is investigating whether several mortgage lenders charged minorities higher rates than whites.
Grace Chung Becker, a deputy assistant attorney general, told a House Financial Services subcommittee yesterday that the department opened the bias investigations based on lending data and referrals, Reuters reports.
Federal Reserve data for 2005 shows that only 17 percent of whites took out costly mortgages, compared to 46 percent of Hispanics and 55 percent of blacks, the Wall Street Journal (sub. req.) reports.
The banking industry cautions that the data does not take into account buyer’s credit scores, the size of the down payment and other factors that influence mortgage rates, according to the Associated Press.
