http://www.washingtonpost.com/
"...Even when black and Hispanic customers got prime loans, they paid higher fees than white borrowers, Justice alleged. The average African American taking out a $300,000 prime loan was charged $2,064 more in broker fees than a similarly qualified white customer. Latino borrowers paid an average of $1,251 more."
This wasn't an isolated incident, it occurred in at least 36 states affecting 34,000 borrowers over 5 years. It was obviously policy, set forth by higher rungs of leadership. I supposed there is more "risk" associated with borrowers living in certain neighborhoods and holding certain jobs, but borrowers had the exact same credit scores as whites but got worse terms. Prime borrowers of black and Latino heritage were 3-4X more likely to receive subprime terms than whites. Similar settlements were hashed out with SunTrust and CountryWide/BofA, so it wasn't just WF. And to be fair to WF, the implicated brokers were independent affiliates, and now WF no longer works with independents.
2) San Bernardino County (part of Southern CA where HALF of mortgages are underwater) considering a plan to use eminent domain to expedite voluntary refinancing:
http://www.npr.org/2012/07/13/
An interesting concept. Fed and local gov'ts have tried almost everything to get banks to stop dragging their feet on re-fis, and it hasn't really worked. One person interviewed for the story had a good point: when your mortgage is underwater, you feel poorer and therefor spend less, which further depresses the economy. So re-fis are a "public good" (and therefore arguably covered under eminent domain), especially when borrowing rates are at record lows but too few people can take advantage of it. Of course the realtors and mortgage brokers are against this, and they have a point - unfortunately at present the County plans to work with a single lending agency to issue new mortgages. That smacks of corruption. Maybe if they opened it up to a few or all lenders to bid for the mortgages, it might make lending rates more competitive and the process more transparent? This process will be probably tied down with red tape for years, but maybe the threat will pressure the banks to streamline re-fis a bit more?
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