By Alexis Garrett Stodghill, BlackVoices.com
The Daily News is reporting that two mortgage brokerage firms, HCI Mortgage and Consumer One Mortgage, have been found guilty of intentionally over-charging black and Latino home loan applicants. To give an example:
The investigation found that Hispanic and black borrowers who used HCI Mortgage paid around 50%, or about $2,500, more than white clients.A user on the Daily News Web site made a very poignant comment regarding the situation. BronxGalG observes:
"This news is not new. Minorities are always being taken advantage of because they don't know how to question things or inform themselves before taking on huge responsibilities. They need to become educated consumers, first and foremost. Until they do that, they will continue to be overcharged and discriminated against on everything. It's a shame this keeps happening and will continue to do so. Let's try to become well informed consumers so this practice stops once and for all."
Well said. These two companies have been brought to justice, having been ordered to pay $665,000 in restitution to 445 minority borrowers. But think about how many companies must have gotten away with the same thing for years, without ever being caught. Think of the firms that prey on minorities today in the areas of car loans, "bad credit" credit cards and "pay day" loans. You can be sure that this recent finding gives us just a hint of the extent of minority lending abuses. This payback is pocket change when compared to the ocean of lost wealth created by the perfectly legal loan scams that are perpetually siphoning funds from blacks.
As predatory lenders clearly see blacks and Latinos as fair game for unconscionable practices, we really do need to look out for ourselves. How can we battle these criminally-minded companies? Please leave your thoughts below.
Comments: (236)
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By: Christine on 1/06/2009 10:47PM
Truth in Lending?
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By: Danny on 1/07/2009 2:03PM
Payday loans? anyone who can read should know better
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By: Gina on 1/07/2009 2:07PM
Exactly there is no real truth in lending.
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By: heavenbound on 1/07/2009 2:10PM
"Minorities are always being taken advantage of because they don't know how to question things or inform themselves before taking on huge responsibilities."
Are you kidding me??? THAT sounds racist to me too! So basically what BronxGalG is saying is that because I'm Latina I don't know how to question things or inform myself before taking on a huge responsibility??? Does anyone else find that extremely insuliting????
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By: baxman on 1/07/2009 2:20PM
Hey Heavenbound, it's all about not being responsible for your own actions, being entitled whether you deserve it or not. Why is this a surprise to you? There are people all over that believe everyone else should take care of them and they bear no responsibility, not even being able to read the fine print. It's a mentality being hailed by the media, government, Hollywood, you name it. While I do agree the banking industry is corrupt and many of their kind should be in prison -- why do you think you see a new bank building on every other corner in every community across America -- people have to be willing to take some responsiblity for the good and the bad in their lives. One last thought -- I am sure what is not mentioned in this tainted article is that many of these folks had horrible credit and automatically are considered a risk and therefore do indeed qualify for higher rates. But lets not let facts get in the way of a good racism story. Again, pay your bills on time and you 'll get a lower rate -- that is called living responsibly....
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By: TTUO2 on 1/07/2009 2:21PM
ARE You kidding me . . . I am WHITE AND PAYING TO MUCH AND THEY ARE TRYING TO TAKE ME TO MILL NOW.
It's not a minority thing, it's a what they can get away with thing.
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By: Steve on 1/07/2009 2:22PM
Do they factor in that blacks & latinos composed more of the "no doc" (no documentation verification of income, salary, assets etc.)? Because this sounds like some trial lawyer BS: even if lower average credit, mortgage lenders can't charge more if there's a racial trend to that credit.
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By: spnglrrspn on 1/07/2009 2:23PM
racism? hardly.....look at the historical default rate on mortgages by race/ethnicity and it will explain exactly why the costs are higher.
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By: bholtzsd on 1/07/2009 2:26PM
As a past mortgage auditor I saw the abuses of these finance and federally chartered banks. Option One in Irvine, CA, is another bad offender. Most of the loans I reviewed were for single, black females with families who paid excessive origination, pts/fees. As my friend told me, "The poor always pay more". Sad situation which should have be regulated by the federal government.
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By: capavad on 1/07/2009 2:26PM
We reap what we sew. One look at the greed in the mortgage industry and we see the sorry harvest of taking advantage of others. A two pronged approach is necessary; hefty fines/restitution on unscrupulous mortgage companies that prey on any uninformed buyers and more education from churches and other non-profits within minority communities that teach/train handling real estate transactions.
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