While lenders might defend their predatory tactics by saying that certain minorities or ethnic groups statistically pose a higher credit risk, the fact of the matter is that there are a number of companies out there looking for easy victims and a quick buck.
Minorities looking for a bad credit home loan refinance are often targeted with no-hassle advertising messages followed by high-pressure sales tactics. While it is understandable that someone with bad credit might pay a higher interest rate on their mortgage refinance, is it fair to have an inordinate number of sub-prime lenders seeking out business from minorities?
Mortgage Refinance Numbers
A study conducted in Texas a few years ago revealed astonishing numbers. Of the borrowers who earned greater than $60,000 annually and borrowing less than 2.5 times their income, 16.7% of white borrowers obtained a mortgage refinance from a high-cost sub-prime lender as opposed to over 30% of Hispanics and almost 47% of African Americans. According to the Washington Post last year nearly 30% of African Americans ended up with high-cost loans compared with only 10% of white Americans.
Bad Credit Protection
For those of you who are minorities, have bad credit, and are interested in a mortgage refinance -- there are steps you can take to protect yourself from predatory lenders:
* Get quotes from more than one lender
* Ask questions
* Don't fall prey to high-pressure sales tactics -- if you don't feel comfortable with the lender then don't get the loan.
These are a just a few tips to help you protect yourself. Getting a bad credit home loan refinance doesn't mean you have to get taken for a ride. Watch out for the deal that is "too good to be true" because it probably is. Many of these lenders have created programs that perpetuate risk and make things more challenging for the borrower. Sometimes this can lead to foreclosure. Prevent this from happening to you by asking questions and keeping your eyes open.