Red-lining has long been a topic of concern in the housing industry. I have known people who actually saw the maps in bank offices, with the big red line surrounding minority neighborhoods on it, or the predominantly minority Census Tracts colored red.
Red-lining was a very real and pervasive problem until Congress stepped in with the Home Mortgage Disclosure Act (HMDA) and the Community Reinvestment Act (CRA), and bank regulators began to impose sanctions on mortgage lenders who demonstrated bias in their lending practices.
No doubt, there are still banks and mortgage brokers who have not gotten the message, and there is still bias in out society, in home mortgages as well as other areas. But I was surprised to see the news articles about a recent study that seemed to show that not only was racial bias still practiced, but that Black and Latino borrowers were being broadly discriminated against in major American cities. This study, produced by the California Reinvestment Coalition (CRC), Empire Justice Center, Massachusetts Affordable Housing Alliance (MAHA), Neighborhood Economic Development Advocacy Project (NEDAP), Ohio Fair Lending Coalition, Reinvestment Partners, and Woodstock Institute, reviewed HMDA data for 2010 and compared conventional and government-backed prime mortgage lending in seven cities, based on borrowers’ race and ethnicity, and the racial and ethnic composition of neighborhoods.
Then I read the report itself. Read more