Residential Segregation and the
Transformation of Home Mortgage Lending

Social Forces, December 2007

Carolyn Bond & Richard Williams


This article shows that, after decades of inequality, the 1990s saw sudden and dramatic increases in lending to low income and minority groups. Drawing in part on the work of Williams, Nesiba and McConnell (2005), we argue that government deregulation, industry restructuring and government-insured loans all fueled this growth by increasing the sources of loans to minorities. We further argue that this increased lending had small but perceptible effects on residential segregation. But, the transformation of the home mortgage industry also gave rise to new lenders who were quite unlike the old. We contend that the nature of lending was even more important than the amount: some lenders and types of lending had much more of an impact on residential segregation than did others. Specifically, loans from traditional lenders tended to decrease segregation. Conversely, loans from subprime and manufactured housing lenders that specialized in serving low income and minority markets either had no statistically significant effect on segregation or even increased it.

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Shankar Vedantam from the Washington Post discusses highlights from this research in Subprime Mortgages and Race: A Bit of Good News May Be Illusory.


Residential Segregation and the Transformation of Home Mortgage Lending (Social Forces, December 2007)

Alternative Assessments of GSE Performance, Influence and Impact (Final Report for HUD, May 2006)

The Changing Face of Inequality in Home Mortgage Lending (Social Problems, May 2005)

Are the GSEs Leading, and If So Do They Have Any Followers? An Analysis of the GSEs - Impact on Home Purchase Lending to Underserved Markets During the 1990s (Final Report for HUD, December 2002)

The Effect of GSEs, CRA, and Institutional Characteristics on Home Mortgage Lending to Underserved Markets  (Final Report for HUD, December 1999; slightly revised version published in Cityscape, 2001)

Racial, Economic and Institutional Differences in Home Mortgage Loans: St. Joseph County, Indiana (Journal of Urban Affairs, 1997)