Women and Subprime Lending: An Essay Advocating Self-Regulation of the Mortgage Lending Industry

Abstract

This project will build upon my most recent article, Racism’s Property Victims: Prime Subprime Mortgage Targets, by considering gender and gender trait stereotypes as predictors of whether or not a borrower receives a subprime loan or refinance. I hope to use 2006 HUD and HMDA data, along with other studies and research, to explore the subprime lending disparity experienced by women, in particular women at the highest income levels.

According to several prominent studies, single women are one of the fastest growing segments of the home buying population. In 1995, single women were 14% of all home buyers and in 2006, single women were 22% of all homebuyers. Moreover, woman-owned companies are the fastest growing segment among small businesses. The bad news is that statistics also indicate that women are the fastest growing segment of the population filing bankruptcy.

My article has the potential to make a very important contribution to this underwritten area of the law. Given the increasingly active and prominent presence of single women in the real estate market, why has this group not been targeted by banks as a promising “emerging” population of candidates for prime loans? Are single women borrowers and business owners perceived by lenders as full participants in the economy? Could it be that the bankruptcy statistics provide all the answers — single women are just bad credit risks — or do the bankruptcy statistics merely reflect the unavoidable consequences of the harm done to women borrowers by lenders earlier in the lending process? My article will address these and other important questions.

Keywords: gender, subprime, women, HUD, HMDA