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The social structure of mortgage discrimination

Author(s): Steil, Justin P.; Albright, Len; Rugh, Jacob S.; Massey, Douglas S.

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Abstract: In the decade leading up to the U.S. housing crisis, black and Latino borrowers disproportionately received high-cost, high-risk mortgages—a lending disparity well documented by prior quantitative studies. We analyze qualitative data from actors in the lending industry to identify the social structure though which this mortgage discrimination took place. Our data consist of 220 depositions, declarations, and related exhibits submitted by borrowers, loan originators, investment banks, and others in fair lending cases. Our analyses reveal specific mechanisms through which loan originators identified and gained the trust of black and Latino borrowers in order to place them into higher-cost, higher-risk loans than similarly situated white borrowers. Loan originators sought out lists of individuals already borrowing money to buy consumer goods in predominantly black and Latino neighborhoods to find potential borrowers, and exploited intermediaries within local social networks, such as community or religious leaders, to gain those borrowers’ trust.
Publication Date: 4-Jul-2018
Electronic Publication Date: 3-Nov-2017
Citation: Steil, Justin P., Albright, Len, Rugh, Jacob S., Massey, Douglas S.. (2018). The social structure of mortgage discrimination. Housing Studies, 33 (5), 759 - 776. doi:10.1080/02673037.2017.1390076
DOI: doi:10.1080/02673037.2017.1390076
ISSN: 0267-3037
EISSN: 1466-1810
Pages: 759 - 776
Type of Material: Journal Article
Journal/Proceeding Title: Housing Studies
Version: Author's manuscript

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