Tuesday, October 5, 2010

Racism in the Recent Forclosure Crisis? Eh, Duh

While other economic studies have concluded that leveraged refinancing, overbuilding, collapsing home prices and a poorly regulated mortgage market were primarily responsible for the rise in foreclosures, the authors of a new Princeton University study argue that the foreclosure crisis also had racial dimensions.

[. . .]

“While policy makers understand that the housing crisis affected minorities much more than others, they are quick to attribute this outcome to the personal failures of those losing their homes — poor credit and weaker economic position,” noted Douglas Massey, the study's other author and a professor at Woodrow Wilson.

“In fact, something more profound was taking place; institutional racism played a big part in this crisis.”The authors call on the federal government to take stronger steps to rid U.S. real estate and lending markets of discrimination via amendment of the Civil Rights Act with enforcement mechanisms to uncover discrimination and sanction those who discriminate. The pair recommends sending "testers" — black and white purchasers into the marketplace to test whether they are treated differently.

Tim Wise's Facebook page led me to the article, Princeton study: Institutional Racism Played Role in Foreclosure Crisis by Kerry Curry. The title pretty much explains it all, but just in case:
The study found that from 1993 to 2000, the share of subprime mortgages going to minorities increased from 2% to 18%. The authors argue that residential segregation created a niche of minority clients who were marketed risky subprime loans.

"Four decades after passage of the Fair Housing Act, residential segregation remains a key feature of America’s urban landscape. Levels of black segregation have moderated since the civil rights era, but declines are concentrated in metropolitan areas with small black populations," the study notes.

Findings show that such black segregation, and to a lesser extent Hispanic segregation, are powerful predictors of the number and rate of foreclosures in the United States — even after removing the effects of a variety of other market conditions such as average creditworthiness, the degree of zoning regulation, the overall rate of subprime lending, or coverage under the Community Reinvestment Act, an act passed in the 1970s to reduce redlining.

Minority-dominant neighborhoods continue to be underserved by mainstream financial institutions, while predatory lenders are commonplace in such neighborhoods, the study notes.

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This isn't too complicated. If you disagree with me, I'm more than happy to have an honest discussion. I'm quite open to learning new facts and ideas. I'm dying for a conservative to explain their ideas in a sensible way.

But, I do have rules, and they also apply to those who agree with me. They just get the benefit of my already knowing the fact they'll be referring to.

So, here're the comment thread rules:

1 - Use facts.
2 - Refer to policy.
3 - Don't rely on theories and conjectures. Show me how, for example, a public health insurance option will lead to "rationing" of health care.
4 - No unfounded attacks on any entity.

If you break those rules, I will edit your comment to my own whimsical satisfaction.

Lastly, perhaps most importantly, I'm not going to entertain too much pro-white/racism-denying discussion. I want this to be a space to discuss strategies to fight racism, not space where I have to fight racism. I want anti-racists to be able to come here for a mental respite. If what you're interested in doing is attempting to demonstrate the fallacy of anti-racism by repeating the same ole comments and questions and accusations we hear all the time, please do that somewhere else.

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