Spitzer Probing Possible Mortgage Bias

The office of New York Attorney General Eliot Spitzer is in the early stages of a probe to determine whether discriminatory practices have been used in setting interest rates and fees charged on mortgage loans, according to a spokeswoman."We've sent out letters to a number of banks," NY AG spokeswoman Juanita Scarlett told MortgageWire. "Based on the [Home Mortgage Disclosure Act] data released in March, we saw some very compelling evidence. .... The banks we are looking at have a higher incidence of subprime lending in New York." Ms. Scarlett said there is "reason to believe" there are disparities in how lending standards are being applied. Some banks have lent money to African-American borrowers at rates four times those given to white borrowers, she said. The investigation was first reported by The Wall Street Journal.