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By comparing neighborhoods with similar median income levels in New York City, researchers discovered that homeowners in predominantly black or Hispanic neighborhoods were more likely than those in predominantly white neighborhoods to receive their mortgages from a subprime mortgage lender.
As many homeowners know, subprime mortgages are more difficult to maintain because of adjustable interest rates, and higher fees and penalties. Thus, they are more likely to lead to foreclosure. Additionally, credit card companies often target subprime borrowers because they often have poor credit histories that prevent them from qualifying for more desirable credit lines and interest rates.
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