Whiteness as Property: Predatory Lending and the Reproduction of Racialized Inequality

Abstract

With the recent economic crisis in the USA, stories of homes lost to foreclosure are increasingly common. In this paper, we attempt to connect this present day problem to its historical roots in racial oppression. We examine 2004 data from the Home Mortgage Disclosure Act database for racial disparities in lending. We find that African Americans are less likely than European Americans to receive loans from regulated lenders. We also find that regardless of lender type and income level, African Americans are more likely than European Americans to receive high priced loans. We argue that these racial differences in access to quality loans that allow for the acquisition of assets through home ownership are part of a historical trend of whiteness as property and undeserved enrichment and unjust impoverishment.

Race, Space, and Cumulative Disadvantage: A Case Study of the Subprime Lending Collapse

“…Our research contributes to a long line of work connecting the historical formation of race in the United States to distributions of income and wealth and the intergenerational transmission of disadvantage (Anderson 2010; Beeman, Glasberg, and Casey 2011; Conley 1999; Harris 1993; Freund 2007; Oliver and Shapiro 1995; Sharkey 2013). Using a strong theoretical model and reliable empirical estimates, we document a clear and consistent pattern of racial disparities that suggest significant racial discrimination occurs across successive phases of mortgage lending carried out by a major financial institution in a major American city.…”

“…Beeman, Glasberg, and Casey (2011) identify “whiteness as property,” such that light skin color is ascribed a value that confers both psychological benefits and concrete advantages in the accumulation of wealth through home ownership. The link between race, property, and subprime lending is consolidated by socially constructed, racialized space in cities (Anderson 2010; Coates 2014; Knowles 2003; Massey and Denton 1993; Neely and Samura 2011; Sampson 2012).…”

Foreclosures, Investors, and Uneven Development during the Great Recession in the Los Angeles Metropolitan Area

“…Furthermore, given that neighborhood racial composition has historically been an important dimension of uneven development, there is also reason to believe that patterns of investment-and therefore investment in foreclosed properties-continue to differ in neighborhoods with varied racial compositions. Predominantly black neighborhoods in particular have historically been sites of cycles of planned abandonment alternating with real estate and financial speculation and exploitation (Metzger, 2000;Wyly et al, 2012), most recently targeted aggressively by subprime firms (Ashton, 2008(Ashton, , 2012Beeman, Glasberg, & Casey, 2010;Newman, 2009;Wyly, Atia, Foxcroft, Hammel, & Phillips-Watts, 2006;Wyly, Moos, Hammel, & Kabahizi, 2009). And while many predominantly Latino communities have experienced similar trends, particularly in places where they make up more of the population, the banking and real estate industries have also treated Latinos and Latino communities as distinctive "niche markets" on which they can increasingly capitalize (Pfeiffer & Molina, 2013).…”

Race/Ethnicity and the Relationship Between Homeownership and Health

“…In the 1970s and 1980s, realtors could refuse services to racial/ethnic minorities, discourage racial/ethnic minorities from purchasing in predominately White neighborhoods to protect prejudiced clientele, 33 or quote higher interest rates, 34 resulting in fewer home purchasing options for racial/ethnic minorities. 35 Although realtor discrimination decreased in the late 1980s, 36 it continues to exist in more obfuscated ways, such as denying financing assistance 36 or steering racial/ethnic minorities away from homes located in healthier, safer neighborhoods, 12 including those with greater educational and recreational resources, such as schools and parks.…”