ACORN study highlights mortgage disparity

Blacks and Latinos in the Capital Of Michigan country are more than likely to stop up with high-cost, subprime loans to purchase or refinance their places than whites, according to a survey of federal mortgage information released today by a national advocacy group.

That's likely to set minorities at greater hazard of facing foreclosure, loaning experts say.

The study, by the Association of Community Organizations for Reform Now, or ACORN, used 2006 mortgage data. It said blacknesses were 1.5 modern times more likely to stop up with high-cost refinance loans than whites. Latinos were 1.3 modern times more likely to weave up with the high-cost loans than whites.

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When looking at new place loans, the disparity grows, according to ACORN's study. Blacks were 2.1 modern times more likely than Whites locally to acquire high-cost home loans. Latinos were 1.4 modern times as likely than Whites to stop up with them.

The racial disparity bes even among borrowers in the same income levels, the survey said.

The figs bespeak lodging favoritism stays a problem, despite an end to blazing red-lining practices, in which minorities were discouraged or prevented from purchasing houses in certain areas, said Carrie Guzman, local fiscal justness coordinator for ACORN.

"Now, it's been pushed underground," Guzman said. "So it's not favoritism in what vicinity you dwell in, but in the mortgages you get."

That agency minority homebuyers, especially, demand to be educated about their loans before sign language any documents, she said.

Nationally, achromatic homebuyers were 2.7 modern times more likely to be issued a high-cost loan than whites. Latinos were 2.3 modern modern times likely to weave up with the high-cost loans.

When refinancing, blacknesses were 1.8 times more likely to be issued high-cost loans than whites. Latinos were 1.4 modern times more likely to make so.

Subprime loans, because of their higher costs, have got a higher foreclosure charge per unit than premier loans.

The delinquency rate, which excepts loans already in foreclosure, was 3.96 percentage for premier loans from April through June, according to information released Thursday by the Mortgage Bankers Association. The charge per unit for subprime loans was 20.84 percent.

One of the jobs with subprime loans, experts said, is many of them are adjustable charge per unit mortgages, which reset after a certain clip period of time. That agency the rate, and the monthly mortgage payment, can travel up.

ACORN's survey said 80 percentage of subprime loans last twelvemonth were ARMs.

Read more on this narrative in Saturday's Capital Of Michigan State Journal.

Contact Jeremy W. Sir Richrd Steele at 377-1015 or .

Volume of mortgage applications down 5.5% - MarketWatch

On a seasonally adjusted basis, mortgage applications to refinance existent loans were down 6.4% inch the hebdomad ended Aug. 17, according to the MBA's up-to-the-minute survey. Week-to-week applications for mortgages to buy places were down a seasonally adjusted 5.0%.

But the state of the mortgage marketplace do it necessary to see these information in context, said John Jay Brinkmann, the MBA's frailty president of research and economics.

"Given the current disturbance in the mortgage market, week-to-week alterations in the purchase applications index should be treated with a certain grade of caution," Brinkmann said in a news release.

"For example, the sudden issue of a major conceiver respective hebdomads ago may have got led to a bump up in applications over the last two hebdomads as those borrowers caught in the closure reapplied for mortgages at other institutions. The driblet in applications we see here may be an indicant that those borrowers have got now been taken attention of," he said.

The volume of applications filed for all loans was up 14.2% compared with the same hebdomad in 2006, the Master in Business reported. The four-week moving norm for all loans was up 1.3%.

Refinancings accounted for 39.9% of mortgage activity last week, unchanged. Adjustable-rate mortgages decreased to 18.6% of applications, down from 21.0% the former week.

Interest rates on 30- and 15-year fixed-rate mortgages averaged 6.49% and 6.20% last week, respectively, up from the anterior week's 6.45% and 6.19%. The norm charge per unit on one-year ARMs rose to 5.84%, up from 5.81% the former week.

The Master in Business study covers about one-half of all U.S. retail residential mortgage originations.

Amy Hoak is a MarketWatch newsman based in Chicago.