The Role of the Secondary Market in Subprime Mortgage Lending
Testimony before the U.S. House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit
Home ownership has been the primary means for most American families to build and pass on inter-generational wealth. However, government-sanctioned racial discrimination in housing and mortgage finance markets robbed many families of this opportunity, and today’s racial homeownership gap is barely changed from the levels of more than 50 years ago. Closing the homeownership gap is essential to closing the racial wealth gap. Additionally, predatory mortgage lending practices drained trillions in wealth from families, especially Black, Latino, low wealth and low-income Americans. CRL successfully advocated for the Dodd-Frank Wall Street Reform and Consumer Protection Act, which has made the mortgage market far safer for consumers. CRL is building on this progress by working to ensure that all credit-worthy borrowers have access to fair, affordable, and sustainable mortgages. And that policy makers and market participants develop solutions that are appropriate to respond to the scale of this housing crisis.
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Race, Ethnicity and Subprime Home Loan Pricing
This study (published in the March-April edition of the Journal of Economics and Business) examines whether borrowers’ race and ethnicity affect subprime loan pricing after accounting for objective determinants, including credit scores and loan-to-value ratios. The results show that African-American and Latino borrowers are more likely to receive higher-rate subprime home loans than non-Latino white borrowers. The authors are Debbie...
Calhoun: Are Legislative Remedies to Limit Predatory Lending Really Remedies?
Federal Reserve System's Fifth Community Affairs Research Conference "Financing Community Development: Learning from the Past, Looking to the Future" The best outcomes for consumers require a competitive market, fair opportunities, and a policy framework that makes both possible. The optimization of a policy framework along these lines is often most limited by the quality of information available concerning market realities...
Subprime Lending is a Drain on Home Ownership
"Yeah, people got bad mortgages. But others were able to finally buy a home" begins a recent article in a national magazine, repeating the common assumption that subprime mortgage lending has helped increase the overall level of homeownership. But a new CRL analysis shows that while the subprime market has produced more than $2 trillion in home loans over the...
Foreclosure, Predatory Mortgage and Payday Lending
Committe: U.S. House Committee on Oversight and Government Reform