If you live in one of Rochester’s majority black and Latino neighborhoods, odds are you have a higher-cost government backed mortgage.
That’s according to a study, Paying More for the American Dream, first reported in the Rochester Business Journal. Among the organizations conducting the study were Empire Justice Center in Rochester.
The report looked at 2010 Federal Housing Administration and Department of Veterans Affairs loans.
In Rochester, these loans accounted for 86.4 percent of all home loans in minority neighborhoods. About a third of refinance loans in black and Latino neighborhoods were government backed, twice the rate as white neighborhoods. Forty percent of black borrowers got government backed refinance loans, compared to 23 percent of Latinos and 15 percent of whites. The study says:
The findings indicate persistent mortgage redlining and raise serious concerns about illegal and discriminatory loan steering.
FHA loans can offer certain advantages. Borrowers with lower credit scores, for example, can qualify for FHA loans, which also typically require smaller down payments than conventional loans. Indeed, government backed loans may be the only viable loan option for many borrowers. FHA loans can also present drawbacks, however. They are typically more expensive, for example, and can take longer to be approved than conventional loans.
The report calls for more government oversight and enforcement.
Links of the Day:
– Few kids pass summer school in the Rochester City School District. I’m not sure why this is so surprising. If there’s a massive failure rate during the school year, why would anyone think students will suddenly get their acts together in six weeks? The article did shed light on chaos and computer problems that are not helping matters.
– State senate Republicans say gun control measures are a non-starter.
– Five people are accused of beating and robbing migrant workers in Wyoming County.
– A former skinhead writes about what he would have told the Wisconsin Sikh temple shooter.