Subprime Mortgage Crisis and Predatory Lending

“Minority lending and the U.S. Subprime Mortgage Foreclosure Crisis” written by Hencock Lewis, does a great job analyzing Country level data about predatory lending techniques during the housing boom from 2004 to roughly 2007. Essentially, the article touches on the techniques that loan officers presented to minorities during this time. Some techniques were zero down payment loans, increased credit scores – which approved individuals for houses they could not afford, as well as outright lying to individuals about particular loans. I understand that individuals need to be economically sound, especially when purchasing something as meaningful as a home, but the data exists that minorities were targeted through these practices. This article looks at the number of foreclosure rates by minorities (minority defined as: Black, Hispanic, and Native Americans) as compared to subprime loans. This article was great in explaining my research topic because it gave an alternate analysis why minorities were affected by the subprime mortgage market. Other variables that I may want to include in my data set are variable of “Steering” (when real estate agents drive minorities to certain neighborhoods), Education, and Marriage. I think these variables will help me to discover linear tendencies in wealth creation within minority communities and the overall subprime mortgage crisis. I have used this article to read about the history of “streamlining” ( a predatory housing practice that took place in the 1940s and 1950s ) and how that technique is not all that different from what happened in the mid-2000s. The more I have learned about my topic, the more I have discovered that, some practices, have been re-occuring themes. 

 

 
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One Response to Subprime Mortgage Crisis and Predatory Lending

  1. campwi02 says:

    Wes,

    It looks like this article is really helping you along your way to answering your research question. What I though was most interesting about this post were the determinants “steering” and “streamlining.” I understand the idea of steering and how it could affect your topic, but I do not know what kind of quantifiable variable you would use for this determinant. What will you be including in your model if you want to account for steering? Also, I have the same question about “streamlining”, however, you have a much better idea of where your project is going than I do. From my point of view it looks like you’re on track and know what your talking about.

    -Will

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