More than one-half of all African-American borrowers received conventional subprime mortgages in 2005, according to a Consumer Federation of America study, which analyzed a sample of the 2005 Home Mortgage Disclosure Act data.The Federal Reserve Board is expected to issue its annual report and analysis of the 2005 HMDA data soon. The CFA study found that 53.0% of African-American borrowers and 37.8% of Latino borrowers received conventional subprime loans, which (according to the HMDA data) have an interest rate of more than 300 basis points above comparable Treasury securities. Looking solely at refinancings, the CFA found that subprime refis increased from 14.7% of all HMDA-reported loans in 2004 to 26.5% in 2005. Over the same period, refinanced loans priced at more than 500 bps above Treasury securities doubled from 4.2% to 8.8%. Earlier this year, regulators at the Fed cautioned industry and consumer groups to expect a substantial jump in the number of HMDA-classified subprime loans because of the flattening of the yield curve during 2005.

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