New paper underlines the social structure of mortgage discrimination

In the decade leading up to the U.S. housing crisis, black and Latino borrowers received high-cost, high-risk mortgages. A new Housing Studies article by Northeastern sociologist Len Albright examines how subprime mortgage lending became so discriminatory.

Published last month, “The social structure of mortgage discrimination” reveals the 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.

Albright, assistant professor of sociology and public policy, MIT’s Justin P. Steil, Jacob S. Rugh, of Brigham Young University, and Douglas S. Massey, of Princeton University, analyze qualitative data from actors in the lending industry to identify the social structure though which mortgage discrimination took place. They examined 220 depositions, declarations and related exhibits submitted by borrowers, loan originators, investment banks and others in fair lending cases.

“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,” the authors wrote.

Read the full article here.

Published On: November 27, 2017 |
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