Are interest rates or fees you're quoted on a mortgage affected by your race or ethnicity? Do mortgage brokers offer the same deals to African American and Hispanic applicants with identical incomes, credit scores and employment histories compared with white applicants?

Based on the study, African American and Hispanic applicants had slightly higher incomes, better credit scores and longer employment backgrounds than their paired white colleagues making separate applications at the same brokerage firms.

Applicants from the minority group should have received the same -- if not better -- mortgage quotes as the white testers. The study sponsors cited some examples. Brokers discussed loan fees with 74 percent of the white shoppers but only 31 percent of the minority shoppers. · White applicants were presented twice the number of loan options -- different rates, fees and structures -- than were presented to African American and Hispanic shoppers, who were often steered toward high-cost sub prime mortgages.

Brokers discussed fixed-rate first mortgages with 90 percent of the white applicants but just 56 percent of the minority applicants. They spent more time discussing loan options with white applicants -- an average 39 minutes -- than they did with African American or Hispanic applicants, who got an average 27 minutes.

Allied brokers are alleged that they are "quoting different interest rates and fees on the basis of race" and steering African American borrowers to higher-cost sub prime mortgages even when they are fully qualified for lower-cost, prime-rate products.

However, Berenbaum said in testimony June 9 to a Federal Reserve fair-lending hearing in Philadelphia that Allied brokers did not treat African American mortgage applicants as seriously as their white counterparts

By M. Sese
http://realestatepress.org