Red and yellow black and white do lenders treat them all alike

Critics often complain about two types of mortgage discrimination: stereotypical ("We don't make loans to_. They're bad risks."), and discrimination through "neutral" rules or practices that adversely impact some identifiable groups of borrowers such as African Americans, Hispan-ics, immigrants, women, singles, single-parent families, and so on.

As company policy, lenders have nearly eliminated stereotypical turn-downs; however, studies indicate that some borrowers pay more for their mortgages than other borrowers—even when their borrower profiles look similar. (Of course, that fact stands as one of the principal themes of this book.) Nevertheless, borrowers who pay more fall disproportionately into some legally protected category. Does this suggest that lenders illegally discriminate? Not necessarily.

Instead, it suggests that some borrowers fail to negotiate interest rates and fees. When the loan rep says, "Gee, this is the best I can do," such borrowers accept the loan on the terms offered. They don't realize that they should respond with their own negotiating gambit, "Really, that's the best you can do? Well, Providence Mortgage quoted a better deal. Sorry, we're wasting our time with you." Or, "We saw much lower pricing on bankrate.com. Why is that? You're not trying to boost your yield spread premium, are you?"

Forget about your gender, race, religion, or politics; some loan reps will charge you higher interest and fees whenever you let them. If you fear the lending process, if you fail to aggressively negotiate, or if you fail to educate yourself about mortgage loan practices and products, you are limp prey for the predators. Warning: Predators come in all colors, ethnicities, and religions. Please do not place trust in your loan rep merely because you share some racial, ethnic, or religious similarities. Industry insiders know all too well that some loan reps use some shared feature to gain trust when no trust is warranted.

To protect yourself, assert yourself (politely, of course). When some loan reps sense a vulnerable victim, they make a killing. Once again: Trust, yes. But verify, too.

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