Low income Federal Housing Administration borrowers could have been billed much more in Maryland

Consumers in Baltimore, Maryland might have fallen prey to costly loans. Some have accused lending groups of discriminatory lending practices. When getting a Federal Housing Administration loan, the rate, no matter your income or credit rating, is supposed to be within a narrow range. Minority-neighborhood consumers in Baltimore might not have gotten a fair shake in 2008, though. One study says that these consumers paid higher rates during that year. Article resource – Discriminatory FHA loans could have cost Baltimore borrowers by MoneyBlogNewz.

Need an FHA loan while in Baltimore?

In Baltimore there was a study released by a community-organizing group. Supposedly, it proves that FHA financial loans use discrimination. For all financial loans that are FHA secured, the interest rate ought to be close to the exact same. Unlike traditional housing loans, the credit rating and amount of the mortgage have very little impact on the rate. Then there are Veteran's Administration financial loans. They’re very similar. In a study of the Federal Housing Administration loans offered to Baltimore, MD, residents, however, it was discovered that homes in minority and low-income neighborhoods tended to have higher interest rates.

Exactly what overages do

"Overages" is a place where FHA financial loans are abused generally according to the Justice Department. Employees are typically given some latitude in determining processing fees and “overages” on loans. Many times the loan overages will choose what the GHA mortgage salesperson can be obtaining paid. This is part of their commission. The loans are then discriminatory as low-income and minority neighborhood consumers are typically billed more in overages.

The Federal Reserve responded to discrimination charge too

2008 was when Communities United did its study. The FHA financial loans had an examination that year that countered the offense of discrimination from the Federal Reserve. The Federal Reserve studied these very same Baltimore Federal Housing Administration loans, using information that is not readily accessible to the public. The exact dates of when mortgages are offered were not published so that privacy would stay intact. The anomaly in mortgage costs is blamed on something else though. The Federal Reserve said the dive in home prices in 2008 brought on it. If the Baltimore Federal Housing Administration mortgages were discriminatory, then the data from 2009 and later years needs to be researched to determine the truth.

Info from

Baltimore Sun

weblogs.baltimoresun.com/business/realestate/blog/2010/11/study_raises_questions_about_disparities_in_fha_loans.html