Pratt, a United Auto Workers member, has five kids and a mortgage payment of $1,100 a month on a house in Detroit worth no more than $40,000. The payment's astronomical because he pays 11% on his mortgage balance, double the national average interest rate. Now, on those crazy terms, he's sure to lose his house.
How did that happen? Pratt, whose story we've been tracking, was "steered" into a sub-prime loan by Countrywide Financial. "Steering" is the polite term for forcing folk into crappy loan terms. And not just any folk: Black folk, like Pratt. Over 60% of African-American mortgage applicants were (and ARE) steered into "sub-prime" predatory loans.
According to exhaustive studies by the Federal Reserve Board and the Center for Responsible Lending (CRL), African Americans are 250% more likely to get a loan with an "exploding interest" clause than white borrowers - and notably, the higher the income and the better the credit rating of a Black borrower, the more likely the discrimination.
The Day the President Turned Black (But has he turned back?), Greg Palast, 29 juillet 2009