Economics of Housing

From Red Lining to Sub-Prime: The Mortgage Industry, Discrimination and Urban Crisis

A really interesting article:

“After decades of being denied credit, many minority communities were victim to “reverse redlining” during the foreclosure crisis, as mortgage companies pushed risky loans in hopes of profiting from their higher interest rates and fees.”

“Countrywide, a now-defunct mortgage company owned by Bank of America, gave subprime loans to 10,000 Hispanic and African-American borrowers, while providing prime loans for white borrowers with similar financial situations.”

“The Department of Justice found that PrimeLending regularly set higher loan prices for African American borrowers. As one of the country’s biggest Federal Housing Authority lenders, PrimeLending provides mortgage loans to low-income customers that are guaranteed by the FHA or the Department of Veterans Affairs.”