October 24, 2014
A report slated for release tomorrow finds that subprime lenders that went out of business with the industry's collapse targeted minority neighborhoods.
The companies' high-risk loans made up 20 percent of all loans in predominantly minority communities, compared to 4 percent of total loans in mostly white areas.
The report was put together by an alliance of policy, research and advocacy organizations.
The study analyzed the geographic operating patterns of 35 high-risk lenders that were very active in 2006, but that went bankrupt, were closed or sold in 2007 as the industry imploded.
The survey focused on lending to minority urban markets in New York, Los Angeles, Chicago, Boston, Cleveland, Charlotte, N.C., and Rochester, N.Y.
In six of these seven urban areas, high-risk lenders' market share in minority neighborhoods was at least three times the share in white neighborhoods.