The Subprime Crisis Hits Home Hard

It comes as no surprise, but is nonetheless deeply disturbing that African Americans and Latinos are hit particularly hard by the subprime mortgage loan travesty.

The victims of avaricious and unscrupulous realtors, mortgage bankers and lenders, too many vulnerable African Americans and Latinos were aggressively targeted and harnessed with unsustainable high interest subprime loans, whether they had good credit or not.

More than 50 percent of all loans made to African American borrowers in 2005-2006 were subprime compared to 21 percent to Caucasians. And African American women have the highest rate of subprime loans compared to any other group, according to a report by the Consumer Federation of America.

Subprime loans cost more than prime loans, have higher prepayment penalties and incur escalating increases that eventually result in a mortgage payment higher than the borrower’s financial circumstances can afford. Too often refinancing under these subprime loans locks borrowers in debt and does not provide them any financial gain.