Memphis NAACP Rally To End Mortgage Bias Against Blacks

The Memphis NAACP rallied this week against 17 lenders that have been cited for mortgage bias against African Americans. Memphis had 608 foreclosures in the month of April alone, up 40% from April, 2007. The group was rallying in support of a suit that was filed last year, alleging that blacks were being charged higher interest rates than white people with similar incomes.

This suit may be a challenging one in which to show discrimination, because at every closing the borrower has the opportunity to review all paperwork including the interest rate and terms of the loan. Also, variables such as credit score, debt to income ratio, and loan size are usually used to determine the interest rate for the loan. While the foreclosure problem is hitting blacks hard, lenders were probably treating all applicants the same, and giving bad loans on an equal opportunity basis during the home purchasing and refinancing boom of a few years ago.