rssThe Racial Politics of Foreclosure
Monday, October 04, 2010 at 2:59 pm
- 13 Comments
A study in the American Sociological Review released today (PDF) shows that predatory lending aimed at minority neighborhoods has led to an uneven and unfair distribution of foreclosures. Princeton Prof. Douglas Massey and graduate student Jacob Rugh studied 100 metro areas and found that in black and Hispanic neighborhoods, more so than white neighborhoods, lenders offered homebuyers subprime mortgages when they qualified for prime, jacked up fees and tacked on payment requirements.
Thus, between 1993 and 2000, “the share of subprime mortgages going to households in minority neighborhoods rose from 2 to 18 percent.” And the racial makeup of a neighborhood became a “powerful predictor” of its foreclosure rate. The researchers call for an amendment of the Civil Rights Act to penalize discriminatory lenders.
On top of that, businesses like pawn shops and payday lenders, ones that “charge high fees and usurious rates of interest,” cluster in minority communities, the Princeton researchers say. “By definition, segregation creates minority dominant neighborhoods, which, given the legacy of redlining and institutional discrimination, continue to be underserved by mainstream financial institutions,” the study says.
Massey and Rugh’s study comes on the heels of a Center for Responsible Lending report that found much the same thing. According to the nonprofit CRL, low-income black homeowners are 60 percent more likely to be foreclosed on than low-income white homeowners. The disparity is worse for the wealthy. High-income black homeowners are 80 percent more likely to be foreclosed on than white homeowners.
The effect is that the recession has wiped out a generation of gains in wealth in communities of color, the CRL says.
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13 Comments
Trackback posted October 4, 2010 @ 3:27 pm
The Racial Politics of Foreclosure « The Washington Independent…
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[...] The Racial Politics of Foreclosure « The Washington Independent [...]
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[...] The Racial Politics of Foreclosure « The Washington Independent A study in the American Sociological Review released today (PDF) shows that predatory lending aimed at minority neighborhoods has led to an uneven and unfair distribution of foreclosures. Princeton Prof. Douglas Massey and graduate … http://washingtonindependent.com/ — Mon, 04 Oct 2010 11:59:35 -0700 [...]
Pingback posted October 4, 2010 @ 4:43 pm
[...] The Racial Politics of ForeclosureThe Washington IndependentAnd the racial makeup of a neighborhood became a “powerful predictor” of its foreclosure rate. The researchers call for an amendment of the Civil Rights Act …Study Finds Foreclosure Crisis Had Significant Racial DimensionsNewswise (press release)Study: Predatory Lenders Partly to Blame for Housing CrisisDailyFinanceall 41 news articles » [...]
Pingback posted October 4, 2010 @ 4:43 pm
[...] The Racial Politics of ForeclosureThe Washington IndependentAnd the racial makeup of a neighborhood became a “powerful predictor” of its foreclosure rate. The researchers call for an amendment of the Civil Rights Act …Study Finds Foreclosure Crisis Had Significant Racial DimensionsNewswise (press release)Study: Predatory Lenders Partly to Blame for Housing CrisisDailyFinanceall 41 news articles » [...]
Pingback posted October 4, 2010 @ 5:40 pm
[...] The Racial Politics of Foreclosure « The Washington Independent [...]
Pingback posted October 4, 2010 @ 9:13 pm
[...] The Racial Politics of ForeclosureThe Washington IndependentAnd the racial makeup of a neighborhood became a “powerful predictor” of its foreclosure rate. The researchers call for an amendment of the Civil Rights Act …Study Finds Foreclosure Crisis Had Significant Racial DimensionsNewswise (press release)Study: Predatory Lenders Partly to Blame for Housing CrisisDailyFinanceall 41 news articles » [...]
Pingback posted October 5, 2010 @ 2:07 am
[...] The Racial Politics of Foreclosure « The Washington Independent [...]
Pingback posted October 5, 2010 @ 5:15 am
[...] The Racial Politics of Foreclosure « The Washington Independent [...]
Trackback posted October 5, 2010 @ 8:00 am
Racial predatory loans fueled U.S. housing crisis: study…
CHICAGO — Predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review. ……
Comment posted October 5, 2010 @ 9:14 pm
Having read the report, I have to say what a bunch of BS. Talk of discrimination and the effects of discrimination are talked about, but no real discrimination was shown. Only various inequities.
Until the fees & interest rates for each group are shown and why the various groups are unable to pay are shown, this is nothing but a story, not research.
The biggest indicator this work was done by a hack is how all the “other” factors were mentioned, but dismissed w/o any real data.
I seriously wonder if the person who wrote this article even read the report and if so, did she understand what was not mentioned. This is why it's getting hard to sell news these days. There is little value is what is being written by the press.
Pingback posted November 20, 2010 @ 12:58 am
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