Maybe that's because banks believe that minorities are less likely to default on their high interest mortgages:

http://www.bloggingstocks.com/2007/10/09/illegal-immigrants-dont-default-on-mortgages/

I have been a lender for 17 years. I can tell you that lenders make the same amount of money lending to black, white, green or blue people. To even think that the typical loan agent cares about anything but making the deal close is absurd. No one makes money if they do not close. I CAN tell you that certain cultures have different borrowing patterns, and tend to have higher credit scores than others.
Some cultures place more emphasis on paying on time.
To really see whether redlining is occurring, you must look at income, credit scores and savings balances to get the complete picture. I cannot believe the "experts" never point this out!

How about telling the whole story and quoting the average fico score of the residents of Plymouth versus the neighborhood to the East. If the minorities in the Eastern neighborhood have lower credit scores and smaller down payments then it is reasonable to expect that they didn't qualify for more traditional financing. As the former President of a NYSE mortgage company I can attest that banks could care less about the color of your skin-we are concerned about your ability and willingness to repay the debt.

There is enough information here to merit a congressional investigation.

Why is it so hard to believe that there is an issue here that leads to 57% of non-whites receiving a higher interest loan than whites?

Something is awry here, rather than speculate and place all the blame on the culture or consumer or business, let's have a little compassion and figure out why this is and find a resolution.

Perhaps there is a little blame to go around for all parties involved?

If we know better, I hope we try to do better.

Let's be real about this - redlinning occures. Higher intrest = Higher incomes for the bankers, investers etc.. To think that color does not matter is not keeping it real. Color matters becouse color reflect "Culture" which produce patterns of habbits.

Lower credit scores reflect higher intrest rates. Regardless of the reasons for the low scores. Unfortunately, there are does of different color who also has low credit score yet obtain more favarable intrest rates. And-that's the reality of it all.

Hey Zac, As well as being unforgivable, hasn't "redlining" also been illegal for, say, the past 30 years or so?

Has anyone considered the "mortgage broker" in all of this? If these loans are made thru a mortgage broker then they are the ones steering the loan to the lender. It is their knowledge and integrity that could and should be questioned. Many of these borrowers could have qualified for FHA loans whice are often underwritten with more lax qualifications that todays subprime. I would be interested to see the percentage of these loans that were done. With lower rates and better terms I would predict that the delinquencies would have been lower.
Think about this. Most people do business with people of their same culture.
If you are going to check skin color, then you need to check the skin color of the person who "originated" the loan for the borrower. Kind of tough to call it a race issue if people are doing business with people of their own race.
Call it a knowledge, integrity, and cultural problem instead.

I think minority neighborhoods are redlined.
Neighborhoods are changing where there is potential gain do to redlining. Most experts always address poor credit. Is that the complete story? Has anyone examine how underwriters wrote the final closing docs? Something such as balloon payments, unnessary repairs costly insurance other than homeowners insurance, as most homeowner would expect to be part of the payment.
Even if the interest rate were higher by some number, most people would want to know how much is the payment. The hidden thing that may effect the monthly payment is the thing that may set up the homeowner for foreclosure. Even foreclosed homeowners will need a place to live. If a person will pay rent that maybe higher than a mortgage-surely they would pay a mortgage if their weren’t underline factors.
I think people were taken advantage off, even those that had “good” credited that took out an ARM.
Many that had “good” credit is in trouble with ARMS just as those that had less than perfect credit. The end is the same Foreclosure!
My remedy is to redo the loans that reflect what is reasonable, without hidden clauses that take away a persons valued procession their home.
Are the homes that are foreclosed purchase by minorities or were they purchased by those that ready to get back in the inner city near downtown etc?
Something has gone wrong sense this thing has affected CEOs to the wage earner, from coast to coast some areas more than others.

Gee, I wonder which area has a higher credit rating. Plymouth or Detroit?

Now gee, I wonder which area would be offered the better interest rate.

The only color that matters here is green, but some insist on seeing black and white. Gee, I wonder why that is!

The racists all give away their hands. If they were really serious about fixing this problem, they would examine why these formerly redlined areas (which happen to be under Democrat control, just a coincidence I'm sure) are societal basketcases with bad credit histories. If they were really serious about fixing this problem, they would examine how the government all but made the problem by threatening lenders with government regulations if they didn't lend to these basketcase areas. They would then notice that the government is offering the solution that they had a big hand in creating.