8QHTXDO%XUGHQ,Q%DOWLPRUH

Income and Racial Disparities

in Subprime Lending

May 2000

U.S. Department of Housing and Urban Development

Office of Policy Development and Research
UNEQUAL BURDEN IN BALTIMORE:

INCOME AND RACIAL DISPARITIES IN SUBPRIME LENDING

This study of subprime lending in Baltimore is part of a series that is constructing

a national look at the growth in subprime lending1. Over the last decade, the amount of

money available for home mortgages to borrowers with blemished or insufficient credit

histories has grown at a tremendous rate. From 1993 to 1998, the number of subprime

refinance loans reported under HMDA increased ten-fold – from 80,000 subprime

refinance loans in 1993 to 790,000 in 1998. In 1994, the $35 billion in subprime

mortgages represented less than 5 percent of all mortgage originations. By 1999,

subprime lending had increased to $160 billion, almost 13 percent of the mortgage

origination market.

The growth in subprime lending over the last several years has been a beneficial

development for borrowers with impaired or limited credit histories. Subprime lenders

have allowed such borrowers to access credit that they could not otherwise obtain in the

prime credit market. However, there is a growing body of anecdotal evidence that a

subset of these subprime lenders, who generally operate outside the federal regulatory

structure, engage in abusive lending practices that strip borrowers’ home equity and place

them at increased risk of foreclosure. For this reason, this report examines patterns in

subprime lending and foreclosures to understand where the risk and impact of predatory

practices may be highest.

AN OVERVIEW 

This study presents a preliminary analysis of mortgage originations in the

Baltimore metropolitan area in 1998 using data reported under the Home Mortgage

Disclosure Act (HMDA). Nationwide, the HMDA data demonstrate the rapid growth of

subprime refinance lending during the 1990s and further, the disproportionate

concentration of such lending in the nation’s low-income and minority neighborhoods.2

These same conclusions hold in the Baltimore metropolitan area.

By providing loans to borrowers who do not meet the credit standards for

borrowers in the prime market, subprime lending can and does serve a critical role in

urban areas such as Baltimore. Some borrowers may have blemishes in their credit

 

1

 For a national analysis, see the HUD report Unequal Burden: Income and Racial Disparities in Subprime

Lending in America, April 2000. For similar analyses of the Atlanta, Los Angeles, and New York

metropolitan areas, see the HUD reports: Unequal Burden in Atlanta: Income and Racial Disparities in

Subprime Lending, April 2000; Unequal Burden in Los Angeles: Income and Racial Disparities in

Subprime Lending, May 2000; and Unequal Burden in New York: Income and Racial Disparities in

Subprime Lending, May 2000.

2

 See the HUD report Unequal Burden: Income and Racial Disparities in Subprime Lending in America,

April 2000.
2

record, insufficient credit history, or non-traditional credit sources. The subprime loan

market offers these borrowers opportunities to obtain loans that they would be unable to

realize in the prime loan market.

But there are two sides to this story. Since subprime lending often operates

outside of the federal regulatory structure, it may be a fertile ground for predatory lending

activities. Anecdotal evidence suggests that these practices may include imposing and

financing excessive fees, bundling high-cost loans with lump-sum credit life insurance,

and requiring prepayment penalties. Predatory lending can have disastrous consequences

for less financially savvy borrowers. Equity may be stripped from their homes, and in

more egregious cases, they may lose their homes altogether.

Some prime lenders have made significant progress in reaching underserved

communities. A recent report for the Treasury Department showed that banks and thrifts

increased the share of their mortgage originations to low-income borrowers and

borrowers in low-income communities from 25 percent in 1993 to 28 percent in 1998.3

However, as the evidence in this report suggests, there are many Baltimore

neighborhoods that could benefit from increased competition from prime lenders in the

home refinancing market. Such increased competition would give borrowers in these

communities alternative options to lenders that may engage in abusive lending practices.

The first step to ensuring that subprime lending enhances the economic health of

the borrowers’ families without exposing them to predatory practices is to learn more

about how and where it operates in America. To further understand geographic

disparities, HUD has analyzed the problem nationwide and has now taken a look at the

data on subprime lending in Baltimore.4 In addition, this report also examines

foreclosures in Baltimore City.

THE FINDINGS FOR BALTIMORE

In general, the analysis shows that subprime lending is more prevalent in lowerincome and minority neighborhoods than in higher-income and white neighborhoods.

This likely indicates that because of their lower incomes, lenders may consider these

borrowers to be a higher credit risk, and these borrowers may therefore be less likely to

qualify for prime loans. However, a lack of competition from prime lenders in these

markets to find creditworthy borrowers may increase the chances that borrowers are

exposed to the predatory practices of a subset of subprime lenders. There is also evidence

 

3

 Robert E. Litan, Nicolas P. Retsinas, Eric S. Belsky, and Susan White Haag, The Community

Reinvestment Act After Financial Modernization: A Baseline Report, U.S. Department of Treasury, April

2000.

4

 HUD identifies subprime loans in HMDA using a list of lenders that primarily originate subprime loans.

For the list of lenders and a discussion of the methodology, see Randall M. Scheessele, 1998 HMDA

Highlights, Housing Finance Working Paper No. 9, Office of Policy Development and Research, HUD,

October 1999.
3

suggesting that after controlling for income, predominantly black neighborhoods may be

comparatively underserved by prime lenders. Finally, the analysis finds that subprime

lenders account for a high share of foreclosures in Baltimore City.

The importance of subprime lending to minorities and low-income Americans,

which is documented in what follows, demonstrates how important it is to these

communities that subprime lending not include any lenders engaging in predatory

practices.

1. As reported in HMDA, the number of subprime refinance loans

originated in Baltimore increased over ten-fold between 1993 and 1998.

The number of refinance mortgages reported under HMDA by lenders

specializing in subprime lending in the Baltimore metropolitan area increased

from 555 loans in 1993 to 8,268 in 1998.

2. Subprime loans are seven times more likely in low-income neighborhoods

in Baltimore than in upper-income neighborhoods. In low-income

neighborhoods, subprime loans accounted for 37 percent of all refinance loans

originated during 1998 – compared with 5 percent in upper-income

neighborhoods.5

3. Subprime loans are six times more likely in predominantly black

neighborhoods in Baltimore than in white neighborhoods.6 In

predominantly black neighborhoods in Baltimore, subprime lending accounted

for 49 percent of home refinance loans originated during 1998 - compared

with only 8 percent in predominantly white neighborhoods.

4. Homeowners in middle-income predominantly black neighborhoods in

Baltimore are almost four times as likely as homeowners in middleincome white neighborhoods to have subprime loans. In 1998, only 9

percent of borrowers in middle-income white neighborhoods obtained

subprime refinance loans while 34 percent of borrowers in middle-income

black neighborhoods refinanced in the subprime market. This percentage is

 

5

 The census tract income categories are as follows: low-income tracts have median incomes that are less

than 80 percent of the metropolitan area median income (AMI); middle-income tracts, between 80 percent

and 120 percent AMI, and upper-income tracts, greater than 120 percent AMI. These income categories are

also used for analyses of borrower incomes relative to the area median income.

6

 This paper adopts the classification of tracts in the Woodstock Institute report, “Two Steps Back: The

Dual Mortgage Market, Predatory Lending, and the Undoing of Community Development,” Chicago, IL,

November 1999. That is, predominantly white neighborhoods are tracts where the minority percentage is

less than 15 percent; and predominantly black neighborhoods are tracts where blacks comprise at least 75

percent of the population. The racial composition of neighborhoods is based on 1990 census data; there

may have been some changes in racial composition by 1998.
4

larger than the 25 percent of borrowers in low-income white neighborhoods

who obtained subprime refinance loans.7

5. The findings are similar when borrowers (rather than neighborhoods)

throughout the Baltimore metropolitan area are examined. In 1998, 45

percent of the refinance loans for low-income black borrowers throughout the

Baltimore metropolitan area were subprime loans, compared with only 13

percent of loans for low-income white borrowers.

6. Like originations, the subprime share of foreclosures is highest in lowincome and predominantly black neighborhoods. Subprime lenders

accounted for 50 percent of mortgages being foreclosed in low-income census

tracts in Baltimore City during the first three months of 1999. By comparison,

the 1998 market share of subprime lenders in Baltimore City was 33 percent.8

In predominantly black tracts, subprime lenders accounted for 57 percent of

mortgages being foreclosed (compared with a subprime market share of 42

percent). The data also show that subprime loans were much quicker to

foreclose than were conventional prime and FHA loans.

THE ANALYSIS

Subprime mortgage lending provides credit to borrowers with past credit

problems, often at a higher cost or less favorable terms than loans available in the

conventional prime market. In most cases, these lenders offer credit to borrowers who

would not qualify for a loan in the prime market, thus expanding access to credit and

helping more families to own their own homes. The higher costs of these loans may

serve to offset the increased risk that these lenders assume in lending to these borrowers.9

In some cases, however, subprime lenders engage in abusive lending practices

known as “predatory lending”, which hits homeowners with excessive mortgage fees,

interest rates, penalties and insurance charges that raise the cost of refinancing by

thousands of dollars for individual families.

 

7

 Of the predominantly black tracts in the Baltimore area, there were 79 low-income tracts and 11 middleincome tracts, but only one upper-income tract. Thus, this analysis of the Baltimore market is restricted to

low-income and middle-income, predominantly black tracts. See HUD’s Unequal Burden report (April

2000) for a separate analysis of upper-income predominantly black tracts at the national level.

8

 The Baltimore metropolitan area consists of 7 counties and includes Baltimore City. The subprime share

of purchase and refinance loans in the Baltimore metropolitan area was 8 percent in 1998.

9

 However, there is evidence that the higher interest rates charged by subprime lenders cannot be fully

explained solely as a function of the additional risks they bear. See Howard Lax, Michael Manti, Paul

Raca, and Peter Zorn, “Subprime Lending: An Investigation of Economic Efficiency” (unpublished paper),

February 25, 2000.
5

HUD’s study of subprime lending focuses mainly on subprime refinance lending,

which accounts for nearly 80 percent of total (home purchase and refinance loans

combined) subprime mortgage lending nationwide and for 83 percent of subprime lending

in Baltimore.10 HUD’s study of subprime loans in the Baltimore metropolitan area found

that:

1. As reported in HMDA, the number of subprime refinance loans

originated in Baltimore increased over ten-fold between 1993 and 1998.

The number of refinance mortgages reported under HMDA by lenders

specializing in subprime lending in the Baltimore metropolitan area increased from 555

loans in 1993 to 8,268 loans in 1998. (See Figure 1.)

The magnitude and speed of the increase in subprime lending creates a critical

need for greater scrutiny. The rapid growth of subprime lending may help expand credit

access for more borrowers; however, some portion of subprime lending may be occurring

with borrowers whose credit would qualify them for conventional loans. Subprime

lending may expose borrowers to higher up-front fees and interest rates than they would

bear if they had obtained prime loans.

2. Subprime loans are seven times more likely in low-income neighborhoods

in Baltimore than in upper-income neighborhoods.

HUD’s analysis reveals that subprime lending is being provided increasingly to

low- and very low-income families and their communities. In Baltimore, 11 percent of all

refinance mortgages in 1998 were subprime, but in low-income neighborhoods, the

percentage of refinances in the subprime market was over three times as large -- 37

percent. (See Figure 2). In the poorest communities, where families make 50 percent or

less of the area median income, subprime refinances accounted for almost 60 percent of

all refinance loans. In middle-income neighborhoods, 11 percent of refinancing families

relied on a subprime loan, as did only 5 percent in upper-income neighborhoods.

According to HMDA data for 1993, only 3 percent of refinance mortgages in low-income

neighborhoods and 1 percent in upper-income neighborhoods were subprime.

3. Subprime loans are six times more likely in black neighborhoods in

Baltimore than in white neighborhoods.

In predominantly black neighborhoods in Baltimore, subprime lending accounted

for 49 percent of home refinance loans in 1998 - compared with only 8 percent in

predominantly white areas. Thus, while subprime refinance mortgages accounted for

only one in twelve refinance loans originated in predominantly white neighborhoods, they

accounted for one half the refinance loans originated in predominantly black

 

10 Subprime lenders are also active in the home improvement market. Home improvement loans of

subprime lenders were excluded from these comparisons.
6

neighborhoods. (See Figure 3.) Comparable 1993 figures reported by HMDA were 6

percent in black neighborhoods and 1 percent in white neighborhoods.

4. Homeowners in middle-income black neighborhoods in Baltimore are

almost four times as likely as homeowners in middle-income white

neighborhoods to have subprime loans.

Notably, even after controlling for differences in neighborhood income,

homeowners in black communities are more likely than homeowners in white

communities to refinance in the subprime market. (See Figure 4.) Among homeowners

living in low-income black neighborhoods, 55 percent turned to subprime lenders,

compared with 25 percent of homeowners living in low-income white neighborhoods.

This disparity also existed in higher income neighborhoods. Among homeowners living

in middle-income black neighborhoods, 34 percent turned to subprime lenders, compared

with 9 percent of homeowners living in middle-income white neighborhoods. In fact, the

subprime share (34 percent) for middle-income black neighborhoods is larger than the

subprime share (25 percent) for lower-income white neighborhoods.

The map of the Baltimore metropolitan area summarizes the neighborhood

concentration of subprime refinance loans. (See Figure 5.) In 1998, subprime mortgages

accounted for at least 25 percent of all refinance mortgages in 156 (or 27 percent) of the

574 census tracts in the Baltimore metropolitan area refinance market. Census tracts

where blacks comprised more than 30 percent of the population (black neighborhoods)

accounted for 118 of these 156 census tracts. On a market share basis, black

neighborhoods accounted for 13 percent of all refinances in the Baltimore metropolitan

area but for 39 percent of all subprime refinances.

5. The findings are similar when borrowers (rather than neighborhoods)

throughout the Baltimore metropolitan area are examined. In 1998, 45

percent of low-income black borrowers in the Baltimore metropolitan

area relied upon subprime loans.

This section analyzes the Baltimore data by individual borrowers instead of entire

neighborhoods; the impacts are similar. Subprime refinances accounted for 26 percent of

all refinancing by low-income borrowers throughout the Baltimore metropolitan area;

only 7 percent of upper income borrowers relied upon subprime refinancing. (See Figure

6.) The borrower data show that blacks in the Baltimore metropolitan area are also

carrying a large proportion of subprime: in 1998, 25 percent of refinance mortgages for

black borrowers were subprime, compared with only 8 percent for white borrowers.11

 

11 It should be noted that borrower race and ethnicity data was not provided for 10,252 (14 percent) of the

75,889 refinance originations and for 2,818 (34 percent) of the 8,268 subprime refinance originations.

Since the “not provided” data was a higher percentage of the subprime totals than of the market totals, and

given that black borrowers account for a large percentage of subprime loans, any method of reallocating this

“not provided” data would increase the presence of the subprime market among black borrowers. Income

data was also not available for 17,202 (23 percent) of refinance originations; the missing income data was

due almost entirely to FHA, which does not require borrowers to report their incomes when they are using
7

Combining data on the income and racial characteristics of the borrower shows

large disparities between black and white borrowers with similar incomes. Subprime

loans accounted for 45 percent of refinance loans originated for low-income black

borrowers, compared with only 13 percent for low-income white borrowers. (See Figure

7.) Similarly, subprime loans accounted for 32 percent of refinance loans for middleincome black borrowers, compared with only 8 percent for middle-income white

borrowers. In fact, upper-income black borrowers were more than twice as likely as

middle-income white borrowers to rely on the subprime market (21 percent of upperincome blacks versus 8 percent of middle-income whites); and were also more likely than

low-income white borrowers to rely upon the subprime market (21 percent for upperincome blacks versus 13 percent for low-income white borrowers).12

FORECLOSURES IN BALTIMORE CITY

This section describes an analyses of foreclosure petitions on homes in Baltimore

City that were filed between January 1, 2000 and March 31, 2000.13 The data on

foreclosures included the petition and origination dates, the interest rate, product type

(FHA, VA, conventional), the name of the lender, and the address of the property.14

HUD used its subprime list of HMDA lenders to identify subprime lenders in Baltimore

City. HUD also identified lenders that specialize in subprime lending but either do not

report to HMDA or were not identified earlier by HUD. HUD’s analysis was based on

1,251 petitions.15

 

FHA’s streamline refinancing program. In this case, any method of reallocating the missing income data

would reduce the subprime share among low-income borrowers.

12 Hispanic borrowers had a relatively small presence in the Baltimore market, accounting for only 441

refinance originations during 1998.

13 HUD obtained the data on foreclosure petitions in conjunction with the staff of the St. Ambrose Housing

Aid Center. The data was obtained from the files of the Circuit Court for Baltimore City.

14 Some of the lenders may be brokers. There was product information (e.g., adjustable-rate, balloon, wraparound, purchase, refinance, home equity) for some petitions but the majority of petitions did not have these

data so these fields are excluded from the analysis.

15 The original file consisted of 1,889 cases. HUD excluded 14 foreclosure petitions from 1999, 51 that had

missing petition dates, and 274 that had dates after March 31, 2000 -- leaving 1,550 foreclosure petitions.

From these HUD excluded: 112 foreclosure petitions that had origination dates before 1990, 46 petitions in

which the lender was missing, 65 petitions in which the lender was reported as the seller of the property or a

realty company, and 76 petitions that either did not have geocode information or were not located in

Baltimore City. FHA loans accounted for 17 percent of the petitions excluded from the analysis.
8

The results of the analysis of foreclosure petitions in Baltimore are similar to

results from analyses of foreclosures in other cities. The critical findings are as follows16:

• Subprime loans had a disproportionate share of foreclosures in Baltimore City’s

low-income neighborhoods. Subprime loans accounted for 50 percent of foreclosure

petitions in low-income Baltimore City neighborhoods compared to 24 percent for

prime and 25 percent for FHA. The subprime share of purchase and refinance

originations in low-income Baltimore City neighborhoods was 33 percent compared

to 37 percent for prime and 27 percent for FHA. (See Figure 10.)

• Subprime loans had a disproportionate share of foreclosures in Baltimore City’s

predominantly black neighborhoods. Subprime loans accounted for 57 percent of

foreclosures in predominantly black neighborhoods compared to 24 percent for prime

and 18 percent for FHA. The subprime share of purchase and refinance originations

in predominantly black Baltimore City neighborhoods was 42 percent compared to 36

percent for prime loans and 22 percent for FHA loans. (See Figure 11.)

• Subprime loans resulted in foreclosure during a shorter period of time after

origination than prime and FHA loans. The mean lag between the origination date

and the date that the foreclosure petition was filed was 1.8 years for subprime loans

compared to 3.2 years for FHA and prime loans. Subprime loans originated in 1999

accounted for a large portion (28 percent) of all subprime foreclosure petitions.

• The subprime share of foreclosures in Baltimore City was 45 percent, compared

with shares of 23 percent for prime conventional loans and 30 percent for FHA

loans.

Other findings include:

• The subprime share of foreclosures is larger than the subprime share of originations.

While subprime foreclosures accounted for 45 percent of the foreclosure petitions,

the subprime share of home purchase and refinance originations in Baltimore City

was 21 percent in 1998.17

 

16 Abt Associates studied foreclosures in Atlanta and the National Training and Information Center studied

foreclosures in Chicago. Abt Associates Inc., Analyzing Trends in Subprime Originations and

Foreclosures: A Case Study of the Atlanta Metro Area, February 2000. National Training and Information

Center, Preying on Neighborhoods: Subprime Mortgage Lenders and Chicagoland Foreclosures, September

1999.

17 The subprime share reported for 1998 may be the most useful share when comparing the subprime share

of foreclosures with the subprime share of originations since 61 percent of subprime foreclosures in

Baltimore City were for subprime loans originated since 1998. The subprime share of the market is derived

from purchase and refinance loans that are reported to HMDA since the foreclosure data includes purchase

and refinance loans. As noted earlier, the subprime origination shares reported in this section for home

purchase and refinance loans in Baltimore City differ from the subprime share of purchase and refinance

loans in the Baltimore metropolitan area.
9

• FHA accounted for 30 percent of all foreclosure petitions in Baltimore City during the

first three months of 2000 and for 28 percent of mortgage originations during 1998.

FHA’s shares of foreclosures in low-income and predominantly black neighborhoods

were also similar to its 1998 origination shares in these neighborhoods. FHA

accounted for 25 percent (18 percent) of foreclosures in low-income (predominantly

black) neighborhoods and for 27 percent (22 percent) of mortgage originations in

these neighborhoods.

To summarize, this analysis of foreclosures in Baltimore shows that foreclosures

on loans initiated by subprime lenders are concentrated in low-income and black

neighborhoods.

CONCLUSIONS

HUD’s analysis of refinance mortgages originated in the Baltimore metropolitan

area during 1998 clearly demonstrates the exponential growth in subprime lending and its

growth for lower-income and, particularly, minority homeowners and communities.

HUD analysis of foreclosures initiated in Baltimore City shows that foreclosures of

subprime loans are concentrated in these same areas. While the growth in subprime

lending has expanded access to credit for many borrowers with impaired or limited credit

histories, these borrowers may also be vulnerable to predatory lending practices and

possible loss of their homes.

Despite the progress made by prime lenders in reaching these markets, the growth

of subprime lending in both lower-income and minority communities strongly suggests

that much more can be done by both primary and secondary market participants to expand

access to the prime lending market.
Figure 1

Growth in Subprime Refinance Lending

( Baltimore Metropolitan Area)

0

1,0002,0003,0004,0005,0006,0007,0008,0009,000

1993 1994 1995 1996 1997 1998

Subprime Mortg

Source: 1993-1998 HMDA Data

1993 1994 1995 1996 1997 1998

Subprime Mortgages 555 1,311 1,651 3,648 6,464 8,268
Figure 2

Subprime Share of Refinance Mortgages

by Neighborhood Income

(Baltimore Metropolitan Area)

3% 1% 1%

5%

11%

37%

0%5%

10%15%20%25%30%35%40%

Low-Income Tracts Middle-Income Tracts Upper-Income Tracts

Note: Low-Income Tracts: Not More than 80% AMI; Middle-Income Tracts: 80-120% AMI; Upper-Income Tracts: More than 1

Subprime Share of Refinance Loans
Figure 3

Subprime Share of Refinance Mortgages

by Neighborhood Race

(Baltimore Metropolitan Area)

1%

6%

49%

8%

0%

10%20%30%40%50%60%

Predominantly White

Tracts

Predominantly Black

Tracts

Note: Predominantly White Tracts: At least 85% White; Predominantly Black Tracts: At least 75% Black.

Subprime Share of Refinance Loans
Figure 4

Subprime Share of 1998 Refinance Mortgage

by Neighborhood Race and Income

(Baltimore Metropolitan Area)

25%

9%

34%

55%

0%

10%20%30%40%50%60%

Low-Income

Tracts

Middle-Income

Tracts

Predominantly Predominantly 

Note: Predominantly White Tract: At least 85% White; Predominantly Black Tract: At least 75% Black.Low-Income Tract: Not More than 80%; Middle-Income Tract: 80-120%.
Baltimore City

Other Black NeighbOther Subprime NeiSubprime and Black 

Source: 1998 HMDA Data

Baltimore Metropolitan Area

Refinance Market

Subprime mortgages accounte25 percent of all refinance mo(or 27 percent) of the 574 cenBaltimore metropolitan area reCensus tracts where Blacks coleast 30 percent of the populat(Black neighborhoods) accounof these 156 subprime census Black neighborhoods accountpercent of all refinances in the metropolitan area but 36 percesubprime refinances. 

Figure 5
Baltimore City

Other Low-Income NeighborhoodsOther Black NeighborhoodsOther Black and Low-Income NeighbSubprime NeighborhoodsSubprime and Low-Income NeighborhSubprime and Black NeighborhoodsSubprime, Low-Income, and Black Ne

Source: 1998 HMDA Data

Baltimore, Maryland Metropolitan A

Refinance Market

Subprime mortgages account25 percent of all refinance mo(or 27 percent) of the 574 cenBaltimore metropolitan area rCensus tracts where Blacks cleast 30 percent of the popula(Black neighborhoods) accouof these 156 subprime census Black neighborhoods accounpercent of all refinances in thmetropolitan area but 36 percsubprime refinances. 

Figure 5
Figure 6

Subprime Share of 1998 Refinance Mortgage

by Income and Race of Borrower

(Baltimore Metropolitan Area)

14%

25%

26%

6%

11%

7%

0%5%

10%15%20%25%30%

Lo w Inc o me Middle Inco me Upper Inco me Blac k White All 

Borrower Income Borrower Race

Subprime Share of Refinance Loans
Figure 7

Subprime Share of 1998 Refinance Mortgages

by Borrower Race and Income

(Baltimore Metropolitan Area)

Note: Low-Income Borrower: Not More than 80% AMI; Middle-Income Borrower: 80-120% AMI;Upper-Income Borrower: 120% AMI. 

Borrower Income

Subprime Share of Refinance Loans

4%

13%

8%

32%

21%

45%

0%5%

10%15%20%25%30%35%40%45%50%

Low-Income Middle-Income Upper-Income

WhiBlac
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Type of Loan

# Prime (289 loans)# Subprime (561 loans)# FHA (370 loans)# VA (31 loans)

Foreclosure Petitions for Baltimore City

January - March 2000

Figure 8
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Income Composition

Low-IncomeOther

Type of Loan

# Prime (289 loans)# Subprime (561 loans)# FHA (370 loans)# VA (31 loans)

Foreclosure Petitions for Baltimore City

January - March 2000

Figure 9
Figure 10

Subprime Share of Foreclosures and Origin

in Low-Income Neighborhoods

27%

50%

33%

37%

24% 25%

0%

10%20%30%40%50%60%70%

Share of Foreclosure

Petitions

Share of Originations

SubPrimFHA

Low-Income Neighborhoods
Figure 11

Subprime Share of Foreclosures and Origin

in Predominantly Black Neighborhood

18%

57%

42%

36%

24% 22%

0%

10%20%30%40%50%60%70%

Share of Foreclosure

Petitions

Share of Originations

SubPrimFHA

Predominantly Black Neighborhoods