Daily News and Information for the Mortgage Loan Originator
Women Are More Likely To Receive Subprime Loans
Wednesday, December 13, 2006
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WASHINGTON, D.C.– Women are more likely to receive subprime home mortgage than men and these higher rates of subprime lending make it harder for households headed by women to build wealth through homeownership. In 2005, about a third of women took out mortgages with interest rates over 7.66 percent (well above the average prime mortgage rate of 5.87 percent) compared to about a quarter of men, according to a new study released today by the Consumer Federation of America.
“The high levels of subprime lending among women compromise their ability to steadily accrue equity bypaying off their mortgage – one of the easiest and most effective pathways to building wealth in America,” said Nancy Register, Associate Director of Consumer Federation of America and National Director of America Saves, a social marketing campaign to encourage lower- and moderate-income households to save and build wealth.
The study examined 4.4 million mortgage originations throughout the country where borrowers identified their gender. CFA examined borrower incomes based on the Area Median Income where they lived to analyze comparable borrowers across the country. The CFA analysis found that the subprime disparity between women and men increased for women with higher incomes relative to men with similar earnings.
Although women earning below the area median income were 8 percent more likely to receive subprime loans than similarly earning men, women earning more than double the area median income were 50 more likely to receive subprime loans than men with similar earnings.
Lender's Partnership Aims to Prevent Predatory Lending The Opportunity Finance Network, a group of 167 financial institutions the first phase of a multi-billion "Fair Mortgage" strategy to combat predatory lending. The group plans on lending $100 million or more.
FHA to Compete in Subprime Market In an effort to increase homeownership opportunity for many Americans, the Department of Housing and Urban Development announced a far-reaching proposal to modernize the FHA and make it an important financing option, even in the Subprime marketplace.
Countrywide Settles Fair Lending Claim After Pricing Probe Countrywide Home Loans has agreed to take steps to avoid charging blacks and Latinos higher rates and fees for loans than white customers. The company has also agreed to spend $3 million for a consumer education program and will provide extensive and updated fair lending training for their loan officers. The probe was a direct result of an analysis of the company's Home Mortgage Disclosure Act data.
Group Says 2.2 Million Borrowers Face Foreclosure on Subprime Loans A new study by an industry watch group claims that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market. The group goes on to claim that one in every five subprime loans outstanding will result in a foreclosure.
U.S. Foreclosures Rise 35 Percent From One Year Earlier According to a national foreclosure tracking service, foreclosures decreased 9 percent from the previous month but increased 35 percent one year earlier. Colorado reclaimed the top foreclosure spot from Nevada.
Realtors Seek To Protect Borrowers From Predatory Lending The National Association of Realtors told a Senate panel that NAR supports stronger anti-predatory lending legislation and more consumer education on nontraditional mortgage products.
Federal Regulators Ask Banks To Evaluate Subprime Lending Practices The subprime mortgage business is starting to have the whiff of the troubled airline industry. At least 20 U.S. subprime lenders in recent months have closed, retrenched, filed for bankruptcy, delayed earnings reports, taken financial hits, or been sold or downgraded amid a rise in delinquency rates. And federal regulators have noticed.
