As the effects of the subprime mortgage crisis continue to unravel, ideas have begun to float about how to prevent a recurring crisis and improve the transparency of mortgages in general. In getting to the root of the problem, a 270-page report was submitted to the Department of Housing and Urban Development and the Urban Institute to provide supporting evidence in legislative efforts surrounding the disclosure of fees.

The study released late last week found conclusions that match two long-held suspicions surrounding mortgages. The first finding showed that "minorities and people without college degrees pay more in mortgage fees than do white applicants and those with a higher education" and the second determined that "loans made through mortgage brokers have higher fees than those made directly by lenders."

The study's author, Susan E. Woodward, suggested that less-educated borrowers were at a disadvantage because of lenders' tendencies to offer them higher fees without full explanations of the mortgage process. The study of 7,560 mortgages found these disparities: black borrowers on average paid $415 more in closing costs than their white counterparts while Hispanic borrowers paid $365 more; neighborhoods where all adults have a college education paid $1,100 less in fees than neighborhoods without college-educated residents; and loans made by mortgage brokers were typically $300 to $425 more expensive than from other types of lenders.

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