Borrowing While Black Follow-Up

Study Shows Racial Disparities in Mortgage Loans

Some call African Americans Conspiracy nuts when they talk of racism, but yet again the masses have been proven wrong and institutional racism exist and it is alive more than ever.

By Steve Daniels

(07/10/07 -- RALEIGH) - A new national study is revealing lending discrimination here in the Triangle.

A national organization says Raleigh and Durham are among the top five worst places in the country where African Americans are getting high cost home loans.

This finding comes eight-months after our Eyewitness News investigation called "Borrowing While Black."

In November, Eyewitness News exposed what many consider discrimination in mortgage lending. Now a national study is exposing more problems in the Triangle.

The National Community Reinvestment Coalition analyzed federal data and determined nationwide - African Americans are almost four times more likely to get a high cost mortgage loan than whites.

That means they're paying an interest rate higher than competitive rates.

John Taylor is the president of the NCRC. He says when you factor in income, unequal leading is the worst in the country -- right in our backyard. "Durham has the distinction of being the number one worst disparate ratio and Raleigh has the distinction of being the number two worst.. in the nation!" Taylor explained.

When we sent our undercover investigative team into banks around the Triangle last fall to see if blacks and whites would get different mortgage rates, the results were startling.

Our black tester, Melvin Watson, was surprised to get a different rate than the white tester. "I don't see (laughs) why there was a difference," Melvin said. "I mean the only difference was the color of our skin."

Stella Adams helped us organize the test which showed an 1/8 of a point difference between the interest rates.

STEVE: You've seen this before?
STELLA: I've seen it before
STEVE: Across the country?
STELLA: Across the country?
STEVE: What do you call it?
STELLA: I call it the Black Tax
STEVE: The black tax, the tax on the African Americans?
STELLA: It's the tax, it's the extra cost of being an African American in American society.

John Taylor says most Americans don't know these things are happening. "Even though most people want to believe we should be color blind there shouldn't be discrimination and so on, I don't think most people realize that it really continues at the level that it does.," Taylor said.

The new study also says high cost loans often include adjustable rates mortgages with low teaser rates. That may lead to foreclosure as the rate increases over time.