“The Color of Money” Expanded: Geographically Contingent Mortgage Lending in Atlanta

“The Color of Money,” a series of articles published in the Atlanta Journal-Constitution in May 1988 (Dedman 1988), documented persistent barriers in access to mortgage credit in Atlanta’s Airican-American neighborhoods. Wyly and Holloway (1999) updated the original study with recent data and found that during the intervening decade traditional lenders still exhibited many of the same patterns that prompted concern in the 1980s. We extend the analysis here (1) by using applicant-level Home Mortgage Disclosure Act data not available for the original study and (2) by proposing and empirically examining a hypothesis about the geographically contingent influence of applicant race on loan application denial probabilities.Probability models that explicitly incorporate cross-level interactions between neighborhood racial and income characteristics and an applicant-level racial identifier support the hypothesized effects. Results are at least partially consistent with traditional redlining arguments, arguments highlighting unintended effects of spatially targeted policy efforts to expand minority and low-income homeownership, and arguments that posit exclusionary discrimination by lenders in predominantly white suburban communities.