Thanks to a number of settlements, we now know that some companies got many of those new signatures via intentional strategies targeting black and Hispanic customers. The most infamous example was Wells Fargo, which paid a $175 million settlement for systematically overcharging black and Hispanic borrowers.
It came out that a Maryland office of the bank referred to subprime loans as “ghetto loans,” and pushed its loan officers to unload as many as possible on the “mud people” of Baltimore and the surrounding suburbs. A crucial element involved pushing expensive and dangerous subprime loans on people who qualified for the safer, lower-interest prime loans.
In conjunction with better-known offenses in 1960s & 70s] like blockbusting (i.e., clearing neighborhoods of white residents through scare tactics), the misdeeds of companies like Eastern Services helped destroy black neighborhoods practically overnight. They did so in much the same way the modern foreclosure crisis has now left deserts of blighted homes in cities all over the country, from Trenton to Fort Wayne to Fayetteville to Rochester to Port St. Lucie and beyond.
Likewise, the “interest-only” or “negative amortization” loan of the subprime era, which allowed people to jump into new houses with little or no money down, was little more than an homage to the “contract mortgage.” The latter was an infamous type of zero-equity real estate loan-sharking that targeted black homeowners throughout the pre-Civil Rights era.