Study: Higher-Priced Mortgages Rose 172%

Higher-priced home purchase loans rose 172% last year among the 10 leading national mortgage lenders, according to a study of federal Home Mortgage Disclosure Act data by Traiger & Hinckley LLP, a New York-based law firm.The firm said diminishing home equity and rising loan-to-income ratios were important factors in the increase. The study also showed that minority and white borrowers paid approximately the same average rate spread on higher-priced loans. "We interpret the growth in rate-spread loans as an attempt by lenders to manager increased credit risk without dashing the American dream of homeownership," said Warren Traiger, a partner in the law firm. "This strategy has not adversely impacted minority groups. On the contrary, lending to minority homebuyers has increased significantly and, despite the greater volume of higher-cost loans, the average price of those loans was consistent across different racial and ethnic groups." The law firm can be found online at http://www.traigerlaw.com.