LANSING (AP): African-Americans and Latinos in the Lansing area are more likely than white borrowers to end up with high-cost, subprime loans when the buy or refinance homes, according to a study of federal mortgage data.

And those who end up with such loans are at increased risk for foreclosure.

The study by the Association of Community Organizations for Reform Now, or ACORN, used 2006 federal data from a sample of 363 lenders nationwide in breaking down local numbers, The Lansing State Journal reported Saturday, Sept. 8, 2007.

It said blacks were 1.5 times more likely to end up with high-cost refinance loans than whites. Latinos were 1.3 times more likely to wind up with the high-cost loans than whites.

The racial disparity exists even among borrowers in the same income levels, the study said. However, the study did not look at applicants’ credit scores, which lenders use to set interest rates.

The Michigan Mortgage Brokers Association in Lansing recommends its members take classes on housing and lending discrimination laws, said President-Elect Audrey Acquisti, co-owner of M Source Financial Group in Clarkston.

Mortgages have increasingly turned delinquent and fallen into default this year, especially in the subprime market.

Subprime loans, because of their higher costs, have a higher foreclosure rate than prime loans. Experts said many of them are adjustable rate mortgages, which reset over time. That means the rate, and the monthly mortgage payment, can go up.

Lawmakers in Washington are expected to debate reforms within the mortgage industry this fall.

Total subprime lending was down more than 50 percent in the first half of the year as lenders pulled back from risky loans. Countrywide Financial Corp. was the top subprime lender, followed by Citigroup Inc., HSBC Holdings PLC, Merrill Lynch & Co. subsidiary First Franklin Financial Corp. and Wells Fargo & Co, according to trade publication Inside Mortgage Finance.

Information from: Lansing State Journal, http://www.lansingstatejournal.com