The NAACP is accusing Wells Fargo and HSBC of forcing black people into subprime mortgages while whites with identical qualifications got lower rates. Class-action lawsuits were to be filed against the banks today in federal court in Los Angeles. Similar NAACP lawsuits are pending against a dozen other subprime lenders. "This is systematic, institutionalized racism," said an NAACP lawyer.
"Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin," he said. Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, the NAACP says. Blacks were disproportionately steered into subprime loans when their credit scores, income, and down payment were equal to those of white homebuyers. (Read more subprime crisis stories.)