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Subprime Mortgage Segmentation In The American Urban System

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  • ELVIN K. WYLY
  • MARKUS MOOS
  • HOLLY FOXCROFT
  • EMMANUEL KABAHIZI

Abstract

Research and policy debates in the United States have focused on the dramatic growth of mortgage lending in the risky subprime sector, which serves consumers with weaker credit histories, and its concentration in racially and ethnically marginalised communities. Evidence linking the subprime boom to the proliferation of predatory abuses, however, is often dismissed as anecdotal or isolated in a few unique places. In this paper, we undertake a geographical analysis of the central justifications for deregulated risk‐based pricing: the proposition that subprime credit serves those who would otherwise be excluded, and reduces exclusionary credit denials. Multivariate analyses of metropolitan‐ and individual‐level processes across the US urban system provide evidence suggesting that subprime mortgage segmentation exacerbates rather than reduces traditional inequalities of denial‐based exclusion.

Suggested Citation

  • Elvin K. Wyly & Markus Moos & Holly Foxcroft & Emmanuel Kabahizi, 2008. "Subprime Mortgage Segmentation In The American Urban System," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 99(1), pages 3-23, February.
    • Handle: RePEc:bla:tvecsg:v:99:y:2008:i:1:p:3-23
    DOI: 10.1111/j.1467-9663.2007.00436.x
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    References listed on IDEAS

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    1. Stephen L. Ross & John Yinger, 2002. "The Color of Credit: Mortgage Discrimination, Research Methodology, and Fair-Lending Enforcement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262182289, December.
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    Cited by:

    1. Selima Sultana & Joe Weber, 2014. "The Nature of Urban Growth and the Commuting Transition: Endless Sprawl or a Growth Wave?," Urban Studies, Urban Studies Journal Limited, vol. 51(3), pages 544-576, February.
    2. Lawrence Brown & Michael Webb, 2011. "Housing Policy in Geographic Context: The American Dream Writ Local," ERSA conference papers ersa10p1371, European Regional Science Association.
    3. Luke Petach, 2020. "Local financialization, household debt, and the great recession," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 807-839, June.
    4. Matthias Bernt, 2012. "The ‘Double Movements’ of Neighbourhood Change: Gentrification and Public Policy in Harlem and Prenzlauer Berg," Urban Studies, Urban Studies Journal Limited, vol. 49(14), pages 3045-3062, November.
    5. Gary A. Dymski & Jesus Hernandez & Lisa Mohanty, 2011. "Race, Power, and the Subprime/Foreclosure Crisis: A Mesoanalysis," Economics Working Paper Archive wp_669, Levy Economics Institute.
    6. Gary A. Dymski, 2014. "The neoclassical sink and the heterodox spiral: political divides and lines of communication in economics," Review of Keynesian Economics, Edward Elgar Publishing, vol. 2(1), pages 1-19, January.

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