Some lenders made it difficult for borrowers to understand their loan's full terms and steered customers into taking out subprime loans when they could have qualified for better terms, the UFE said.
The report estimated the total loss of wealth "for people of color" including Latinos to be between 163 and US$278 billion for subprime loans taken out during the past eight years.
"We believe this represents the greatest loss of wealth for people of color in recent US history," the UFE said, saying America was entering an economic downturn that could match the Great Depression.
The administration of US President George W. Bush is mulling remedies to bolster the economy after brokering a vast mortgage relief plan last month aimed at helping up to 1.2 million distressed homeowners at risk of foreclosure.
"Communities across the nation are being torn apart. As mortgages go into foreclosure, people move out, houses are boarded up, crime and fires increase, neighboring properties are devalued, and the tax base erodes," Brenda Cotto-Escalera, one of the report's co-authors, said.
The UFE also criticized the trading of mortgages between banks, compared to times when loans were overseen by a local bank manager familiar with a borrower's income and outgoings.
The Boston-based group seeks to address what it says is a widening income gap in the United States, and advocates for a "powerful fair economy."
