Higher subprime rates for blacks, Hispanics baffling

0 Comments | USA TODAY, September, 2007 | by Sue Kirchhoff

WASHINGTON -- Blacks and Hispanics were far more likely than whites to take out higher-cost subprime mortgages in 2006, the Federal Reserve said Wednesday, even as a respected economic forecast center said the nation was in for a "near-recession experience" due to housing market turmoil.

The Fed report comes as an estimated 2 million or more homeowners -- many in minority neighborhoods -- are at risk for foreclosure as adjustable-rate subprime loans reset to higher rates. Subprime loans are higher-cost products for those with poor credit.

The housing carnage is hurting the financial markets and the broader economy. The UCLA Anderson Forecast predicts that growth will fall sharply into 2008 but that the economy will be supported by strong exports.

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