Study: Minorities in LV more likely to face bad mortgages

Black and Hispanic home-loan applicants were more likely to get high-cost mortgages than white home-loan borrowers in the Las Vegas area in 2006, national advocacy group ACORN reported Wednesday.

ACORN, the Association of Community Organizations for Reform Now, studied home-loan statistics from the federal government on 172 cities.

"We have seen a sharp increase in foreclosures in some of the urban and minority communities that most need to build wealth through homeownership," Maude Hurd, national president of ACORN, said in a statement.

Roger Cook, owner of Ace Office Supplies and a member of ACORN, said he sees a similar pattern of prejudice against minorities in Las Vegas.

"It's no longer sitting at the back of the bus. It's taking your money," Cook said.

Sean Corrigan, president of Aspen Mortgage, said he doubts any mainstream mortgage lender in Las Vegas would try to push minority clients into more costly mortgages, citing intense competition for customers.

"Every loan counts to us," Corrigan said.

Aspen tries to help applicants obtain the best mortgage regardless of their race or ethnic group, Corrigan said. The lender said he has read reports that members of minorities in the financing business are treating their customers unfairly.

Brock Davis, president of the Southern Nevada Chapter of the Mortgage Bankers Association, said he has seen similar reports about ethnic groups that included Asian and Russians taking advantage of their own people.

Davis, whose mother was a Mexican citizen, said more high-cost loans probably were made to minority borrowers, because former Presidents George H.W. Bush and Clinton pushed the financial community to provide home loans to a broader range of people.

ACORN said about half of blacks and Hispanics in Las Vegas were signed up for high-cost loans for home purchase in 2006, compared to one quarter for white residents.

The study showed that 49 percent of Las Vegas area home-purchase loans made to blacks were high-cost loan products. Also, 50 percent of the home-purchase loans made to Hispanics in the Las Vegas area were high cost, according to ACORN.

Blacks and Hispanics were more likely than whites to get high-cost home refinancing loans, the study indicated.

The organization said 47 percent of refinancing loans to blacks were high cost, and 45 percent of refinancing loans to Hispanics were high cost. Yet 29 percent of refinancing loans for whites were high-cost, according to ACORN.

Carolyn Banks, 48, a former blackjack dealer looking for work, said she believes she got a less attractive loan package because of her race.

She said she refinanced with an adjustable-rate mortgage so that she could pay off her car loan while she was working. The adjustable rate mortgage currently bears an 11 percent or 12 percent rate, about twice the interest rate she was paying under a fixed-rate loan.

Banks said she was concerned that the adjustable rate could be increased to a maximum of 23 percent. But the lender, who she believes was a mortgage broker, assured her that she could refinance in a few months.

Her monthly payment jumped to $1,600 without insurance or taxes from $1,200 including insurance and taxes, Banks said.

Numerous lenders have told her she cannot qualify for a new loan now. She fears she will lose the house if she cannot refinance before the mortgage rate is adjusted next summer.

Cook said his monthly payment is still about $1,160, but he fears he cannot afford the monthly payments when the mortgage is adjusted in 2009.

Cook, a former craps dealer, said he is three months late in mortgage payments. He moved his business office to his home to save expenses. Chase, however, is unwilling to negotiate lower payments and now demands payment of $1,100 in attorney fees, he said.

"It's been terrible. It's been like a nightmare talking to these people," Cook said. "They don't care."

Chase spokesman Thomas Kelly said: "We are willing to work with borrowers. We want to be in the business of lending money. We don't want to be in the business of owning houses."

Chase established the Home Ownership Preservation Office, he said, to work with organizations such as ACORN to help borrowers keep their homes.