The Higher Cost of Being African American or Latino:
Subprime Home Mortgage Lending in New York City, 2004–2005
November 2007

The Economic Justice Project has issued a report on subprime lending in New York City that shows that African-Americans, Latinos, and residents of predominantly minority neighborhoods received higher percentages of subprime loans than whites and residents of predominantly white neighborhoods.

Specifically, the report found that in 2005:

• Nearly half (45.9%) of all home mortgage loans to African-Americans were subprime, nearly three times higher than the percentage to whites (16.6%);
• Nearly forty percent (39%) of all home mortgage loans to Latinos were subprime, more than two times the percentage to whites; and
• More than forty percent (42.1%) of all home mortgage loans to residents of predominantly neighborhoods were subprime, nearly four times higher than the percentage to residents of predominantly white neighborhoods (11.7%).

The report identifies several large lenders whose percentages of subprime loans to African-Americans, Latinos, and residents of predominantly white neighborhoods were higher than average.

Professor Richard Marsico, author of the report, stated, “Although the data in the report do not contain sufficient information to conclude that the disparities are the result of discrimination, the disparities are high enough so that government agencies who have access to the information should take notice and take investigatge action and enforcement steps if necessary.”

The Report concludes, “As government officials, lenders, and advocates contemplate the subprime home mortgage crisis and its fallout, they must develop solutions that address the impact of the crisis on borrowers and neighborhoods and the disproportionate impact on borrowers and neighborhoods by race. Only solutions that take this into account will be sufficient and complete.”