DENVER—Gov. Bill Ritter on Monday vowed to crack down on discriminatory lenders after a study showed blacks and Hispanics were placed into subprime loans at a rate more than double that of whites and Asians.
“This evidence shows that predatory lending is targeted at our most vulnerable populations and the problem is exacerbated by discrimination,” Ritter said.
Ritter said an analysis of subprime lending showed that 43 percent of blacks and 43 percent of Hispanic borrowers had subprime loans, compared with 20 percent each for white and Asian borrowers, using federal figures gathered using the Home Mortgage Disclosure Act.
Ritter said the figures will be used to find individuals or companies “preying on these populations” and go after them for fraudulent loan practices.
The loans were given to many borrowers who had questionable credit histories and who obtained risky loans, resulting in a nationwide wave of home foreclosures.
Those defaults contributed to a credit squeeze that has spread throughout the financial system, making it harder for first-time home buyers and people seeking to refinance.
Rico Munn, executive director of the Colorado Department of Regulatory Agencies, said borrowers in Otero County—where Hispanics make up 38 percent of the population—were most at risk of foreclosure, where 45 percent of the loans are subprime.
Other counties at greatest risk include Adams, Weld, Pueblo and Denver where clusters of subprime loans overlap densely populated minority communities.
Ritter said Colorado didn’t begin regulating mortgage lenders until a year ago and the extent of the problem isn’t known.
“These raise red flags for us,” Munn said.
