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The Fleecing of Black Borrowers

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· We should require mortgage lenders to quote a firm price 30 days before closing, giving applicants time to shop for the best price before committing.

· The offer should provide information in a form that consumers can understand and compare. Four dollar figures would be sufficient for this "Home Loan Price Tag": loan proceeds, nonrefundable upfront charges, maximum monthly payment and loan length.

· Loan structures should be simple enough that this "price tag" is complete. Balloons, prepayment penalties and negative amortization should, in most instances, be prohibited.

· The price tags should instruct consumers to compare tags from other lenders. A borrower could choose any of these loans once the initial 30-day price-lock period ended.

· Finally, we could bring the home loan market to the consumer. A neutral party could post price tags on a secure Web site, along with key borrower and property information. Lenders could send competing price tags to consumers through the neutral party. The advantages of firm, comparable, competitive bids would flow to both sides of the "digital divide."

We can increase the efficiency of the market and decrease race disparities by making price shopping for home loans easier for all Americans.

The writer is an associate professor at Loyola Law School in Los Angeles and author of an article on predatory lending in the current edition of the Maryland Law Review.

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