Washington, DC - Today Congressman Melvin Watt (NC-12) joined the Center for Responsible Lending and members of the Congressional Black Caucus (CBC) and the Congressional Hispanic Caucus (CHC) in calling for the end of racial and ethnic disparities in the subprime housing mortgage lending market.

 

“It’s shameful that we continue to see evidence that race still plays a big part in what price consumers pay for home loans, often the largest investment many people will ever make. Homeownership is a critical component in the accumulation of wealth and we must do more to ensure that minority borrowers have fair access to credit without being overcharged,” said Watt.

 

Last fall, information obtained from the Home Mortgage Disclosure Act (HMDA) showed that black and Hispanic homebuyers are much more likely to get higher-rate subprime loans. A new study of home mortgage loans by the Center for Responsible Lending matched 50,000 subprime loans from HMDA data with mortgage databases and found that African-Americans and Latinos are 30% more likely get higher-cost loans, even after controlling for credit qualifications and other risk factors.

 

Congressman Watt is a lead sponsor of anti-predatory lending legislation that seeks to eliminate specific abusive lending practices. The legislation is based on the State of North Carolina's predatory lending statute, which is widely considered the model state statute for preventing abusive lending while preserving access to credit.