Dawning of a New Age: Examination for Discrimination in Lending
Posted: 11 Feb 2009
Date Written: September 15, 2008
The earlier public releases of the Home Mortgage Disclosure Act ("HMDA") data in 2004-2006 engendered lively and, sometimes impassioned, debate over the pricing of mortgage credit and its implications regarding the treatment of minority mortgage borrowers. In the decade before the HMDA data contained pricing information, most of the debates concerning mortgage lending focused on the access to credit of minority borrowers. With the release, on September 11, 2008 of the 2007 HMDA data, it is clear that both the pricing of mortgages for minority borrowers, and the access to credit for home mortgages, remain issues that require detailed exploration. In one sense, the dramatic decline in lenders reporting higher quantities of high priced loans should provide reassurance to those concerned with any disparities in pricing. On the other hand, the percentages of loans originated to minority borrowers, relative to past years, cannot but refocus concern on access to credit. This paper presents some detailed information on lending, on a loan level, in the 2004-2005 years as the subprime industry was growing rapidly. We also highlight some of the recent changes observed in the primary and secondary markets that might impact examinations of potential discrimination in lending over the next few years.
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