Homeowners in the Southwest and the Southeast are much more likely to refinance with subprime loans than those in the Pacific and New England regions, according to a new study by the Consumer Federation of America."The variation in prevalence of high-cost mortgages by geography raises concerns about whether this type of lending is priced solely on risk factors, or whether some lenders take advantage of the lack of competition in certain localities to price mortgages as high as they can," said Allen Fishbein, the CFA's director of credit and housing policy. According to the study, "Subprime Cities: Patterns of Geographic Disparity in Subprime Lending," the share of subprime refinance lending ranges from 10.5% in the Pacific states to 27.4% in the Southwest. Moreover, regional variation was even higher for what the CFA termed the most expensive segments of subprime lending (with interest rates generally above 10%), with only 2.3% of Pacific state homeowners receiving such loans compared with 10.3% of Southwestern homeowners. The loan information was obtained from lenders who had compiled the data for reports they must file under the Home Mortgage Disclosure Act. The CFA can be found online at http://www.consumerfed.org.

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