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It was a system built to exploit the credulousness of borrowers, including many homeowners who had no idea that brokers weren't looking out for their best interests. It was also a recipe for discrimination. Regardless of their credit-worthiness, borrowers of color were much more likely to receive high-interest loans or loans with prepayment penalties, teaser rates, and other tricky features. Among borrowers with better-than-average credit scores, African-Americans and Latinos wound up with high-interest loans more than three times as frequently as whites did.
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