High-Cost Home Loans More Common in Pr. George's - washingtonpost.com
This is a troubling report. The article discusses several different explanations.
Residents of majority-black Prince George's County are much more likely to be saddled with high-interest home loans than residents of predominantly white areas in the rest of the region, placing them at greater risk of financial distress and foreclosure. About 43 percent of Prince George's County residents who refinanced their homes in 2005 received high-cost loans, compared with 24 percent of homeowners regionwide, according to Federal Reserve data compiled for The Washington Post by the Consumer Federation of America. Similarly, 43 percent of people buying homes in the county in 2005 financed their purchases with high-cost loans, compared with 20 percent regionally...People can find themselves with high-cost loans for many reasons. Prince George's County is the nation's wealthiest majority-black jurisdiction, and housing costs there are high. If homeowners also have high car payments, student loans or credit card balances, that could raise their debt-to-income ratio, forcing them into costly loans. Overspending or paying bills late can also hurt people's credit.