Minority borrowers were more apt to receive higher-cost mortgages than whites last year, and they were denied loans more often, according to a Federal Reserve analysis released Wednesday.

“The incidence of higher-priced lending for blacks and Hispanic white borrowers is notably greater than for non-Hispanic whites,” the Fed study said. “Similar patterns are shown in racial and ethnic differences in denial rates.”

The study did not include information on borrowers’ credit scores, which Robert Avery, a Fed economist and lead author of the report, described as a significant piece of missing information. The study was based on data provided to the government by lenders under the Home Mortgage Disclosure Act.

It comes a month after concerns over rising mortgage default rates sparked instability in financial markets worldwide. Worries centered on subprime mortgages, which go to borrowers with weaker credit ratings and carry higher interest rates than loans issued to borrowers with strong credit.

The percentage of borrowers behind on their mortgage payments topped 5 percent at the end of June, the highest rate since 2002, according to a report earlier this month by the Mortgage Bankers Association, a trade group based in Washington, D.C. In Texas, about 6.5 percent of mortgages were past due.

High-cost loans are more common in North Texas than in the nation as a whole, Mr. Avery said.

Nationwide, nearly 54 percent of black borrowers received high-priced mortgages in 2006, compared with almost 47 percent for Hispanics and about 18 percent for whites, according to the Fed study. The incidence for Asian borrowers was less than 17 percent.

The gap between black and white borrowers – amounting to 36 percentage points – narrowed to less than 13 percentage points after adjusting the data to account for variables such as location, income and loan amount. But that’s higher than the comparable gap in 2005, which was 10 percentage points.

“There continues to be this significant disparity,” said Mr. Avery. “The impact of that on the amount of money people have for other things is not inconsequential.”

In the Fed report, a primary mortgage is considered high-cost if it carries an interest rate 3 percentage points or more above the rate on long-term U.S. Treasury debt, Mr. Avery said.

In another report released Wednesday, two Hispanic groups said some Hispanic borrowers may be saddled with high-cost mortgages even though they could have gotten more affordable loans.

Many Hispanic families, some of them buying their first home, turn to bilingual mortgage brokers for help getting a loan, according to the report released Wednesday by the National Council of La Raza and the National Association of Hispanic Real Estate Professionals. Some of these families have fallen prey to unscrupulous brokers, the report said.

“Many Latino homeowners may have received a subprime mortgage even though they could have qualified for prime credit,” said the report, which was based on interviews with experts in the mortgage industry. “As a result, they are wasting hard-earned income on fees and interest, instead of building wealth through payments on the principal of their loan.”

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http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-MORTGAGE_13bus.ART.State.Edition1.35ecee8.html