By Jon Ortiz
African Americans and Latinos in California routinely pay more for home loans with
some lenders, according to a report released Wednesday.
African Americans
and Latinos in five of the state's largest cities were two to three
times as likely as whites to get a loan from a higher-cost subprime
lender than from a lower-cost lender such as a bank, according to the
study by the San Francisco-based California Reinvestment Coalition.
Using
2003 data collected under the federal Home Mortgage Disclosure Act, the
nonprofit coalition's report distills lending patterns from seven
financial corporations in Sacramento, Fresno, Los Angeles, Oakland and
San Diego. Today is the deadline for lenders to release 2004 data.
The report also concludes that Citigroup Inc., HSBC Bank USA and Wells
Fargo Bank made mortgage loans to African Americans and Latinos that
cost more than 2 1/2 times as much as those made to most other bank
customers.
In
Sacramento, for example, subprime lenders Household Financial Corp. of
California and Beneficial California Inc. made 98 loans to African
Americans. Their lower-cost affiliate, New York-based HSBC, made two
mortgage loans to African Americans.
Wells Fargo officials said Wednesday that they had not yet reviewed the
findings, but "based on the allegations made in the group's press
release, Wells Fargo believes that the report is flawed," said company
spokeswoman Julie Campbell.
"The data upon
which the report appears to be based does not appear to factor in a
borrower's relative credit risk and key loan factors," she added,
"which is how lending decisions are made."
The
coalition's study she said, fails to consider a borrower's financial
situation, whether the interest rate is fixed or adjustable, the value
of the property and other factors that determine loan costs.
Both Wells Fargo and Citigroup said they are committed to equal credit access for all people.
HSBC did not return a request for comment by The Bee's deadline.