Discrimination in Mortgage Lendingby Robert Schafer, Helen F. Ladd
This book substitutes rigorous and systematic analysis for the undocumented claims that have characterized the debate on "redlining"—the denial of mortgage money to poorer neighborhoods. In addition, Schafer and Ladd discuss discrimination against individuals, appraisal practices, and the likelihood of default, analyze recent policy decisions, and recommend a range of new policies. The thorough documentation that supports this analysis was obtained through an examination of individual mortgage applications—denials as well as approvals—in New York and California, the only two states in which such data is available, its disclosure mandated under state law.
One of the book's major findings is that discrimination in home financing is based far more on an individual's race than on the location of the property—that although the redlining debate has turned on the issue of geographic discrimination, the underlying reality is one of racial discrimination, and individuals are more often the targets than are neighborhoods.
After an introductory chapter, Discrimination in Mortgage Lending takes up default risk in mortgage lending, appraisal practices, the flow of funds, lending decision models, the decision to lend in California, mortgage credit terms in California, the decision to lend in New York, mortgage credit terms in New York, a summary of results, and recommendations.
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