Does Credit Explain Discrimination in Lending? New Data for Baltimore

Research shows that minority neighborhoods have much higher shares of subprime or high cost mortgage loans than comparable white neighborhoods. However, since the data reported by lenders do not include information on the credit risk of borrowers, it was unclear whether the disparity could be explained by differences in the credit profile of these neighborhoods.

On May 28th, JOTF and the Baltimore CASH Campaign co-hosted a forum to share new research on the issue. Dr. Christopher Herbert, a Senior Associate with Abt Associates Inc., presented the findings of a new study funded by the Annie E. Casey Foundation. Dr. Herbert’s research used Experian data for 13 cities targeted by Casey Foundation initiatives (including Baltimore) to assess racial/ethnic disparities in mortgage lending while controlling for credit scores.

The goal of the analysis was to identify the extent of any racial disparities in local communities and to identify lenders that could be encouraged to increase the flow of lower cost mortgage credit in these areas. Advocates and researchers from around the area gathered at the Baltimore NeighborWorks America office to learn more about the findings, ask questions, and share thoughts on how to bring fairer, more affordable loan products into low-income and minority communities.

To learn more, contact Andrea Payne at 410-234-8303.

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