A new report reveals that loans insured by the ""Federal Housing Administration"":http://www.fha.com/ and ""Department of Veterans Affairs"":http://www.va.gov/ are ""disproportionately prevalent"" in neighborhood's of color. The study, which is the sixth edition of the ""Paying More for the American Dream"" series, found that government-backed loans comprised nearly 67 percent of home purchase loans in communities of color.[IMAGE]
The survey is the result of a collaboration among the ""Woodstock Institute"":http://www.woodstockinst.org/, ""Empire Justice Center"":http://www.empirejustice.org/, ""Neighborhood Economic Development Advocacy Project"":http://www.nedap.org/, ""Reinvestment Partners"":http://www.reinvestmentpartners.org/, ""California Reinvestment Coalition"":http://www.calreinvest.org/, the ""Massachusetts Affordable Housing Alliance"":http://www.mahahome.org/, and the ""Ohio Fair Lending Coalition"":http://www.organizeohio.org/fair-lending-coalition.html. Data complied by the organizations encompasses mortgage loans originated and refinanced in Los Angeles,[COLUMN_BREAK]
California; Boston, Massachusetts; Charlotte, North Carolina; Chicago, Illinois; Cleveland, Ohio; New York City, New York; and Rochester, New York.
Statistics from the report indicate that borrowers of in neighborhoods of color received government-backed loans approximately twice as often as those in predominantly white areas. When refinancing their mortgages, numbers showed that homeowners in communities of color used government-backed avenues three times as often as those in white neighborhoods.
For African-American borrowers, government-backed loans made up three of every four mortgage purchases. Among Latino borrowers, government-backed loans accounted for two of every three mortgages.
African-Americans choosing to refinance used government-backed options 3.5 times more often than white homeowners. Meanwhile Latino borrowers utilized FHA or VA refinancing measures 2.1 times more often than their white counterparts.
""These disparities are very troubling. Some folks who were eligible for a more affordable conventional loan may have been steered into an FHA loan based on their race or where they live,"" said Barbara VanKerkhove of the Empire Justice Center.
Alexis Iwanisziw of the Neighborhood Economic Development Advocacy Project also contributed commentary, noting, ""These patterns are symptoms of a deeper problem: the lack of access to prime conventional loans by borrowers and neighborhoods of color ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô in other words, on-going redlining.""