The majority of subprime home loans originated in 2006 were made to non-Hispanic Whites and upper-income borrowers, according to a new study from ComplianceTech.
The company noted that 70.82 percent of the 1,917,809 subprime loans originated two years ago went to non-Hispanic Whites, while upper income borrowers received nearly 40 percent of the loans.
Low-income borrowers accounted for only 149,173, or 7.57 percent of 2006 subprime-rate mortgages, putting into question numerous reports that claim most subprime borrowers weren’t well-to-do.
Interestingly, the report also found that single borrowers were more likely to receive subprime loans, accounting for nearly two-thirds of such loans in 2006.
“These presumably single borrowers do not have two income sources to support the mortgage … and if these borrowers are single-head of households experiencing trouble making their mortgage payments, what about the children, said Maurice Jourdain-Earl, co-founder and managing director of ComplianceTech.?”
“To resolve the true issues, the subprime lending meltdown must be addressed as a nationwide problem with aspects that affect Whites as well as minorities, in suburban, rural and urban communities,” he added.
All that said, the company recognized that a disproportionate share of loans were made to minorities and low-income families, so perhaps rich, white families are just more likely to own a home, and thus, received more loans?
The findings are based on data submitted by mortgage lenders under the Home Mortgage Disclosure Act (HMDA), analyzed using data-mining tool LendingPatterns(TM).
(photo: cocoinzenl)
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