A new study from NYU’s Furman Center for Real Estate and Urban Policy shows that subprime lending in the city last year was much more common in minority-heavy neighborhoods than in mostly white neighborhoods, irrespective of median income levels. For example, 44 percent of loans in East Flatbush, a predominantly black and Hispanic neighborhood, were subprime; in Sheepshead Bay and Gravesend, which are majority white, 10.8 percent of mortgages were from subprime lenders. All three neighborhoods have median incomes in the $40,000 to $50,000 range. Though the study didn’t take into account things like borrowers’ credit histories, it definitely raises questions about whether subprime lenders have engaged in discriminatory practices by offering white borrowers loans with better rates. There certainly is a disgraceful element here, but how big it is, we don’t know, said Julia Vitullo-Martin, a senior fellow at the Manhattan Institute. Is it a few rogue lenders, or is it an extensive problem that requires a regulatory response? We don’t know yet.
Study Finds Disparities in Mortgages by Race [NY Times]
Tilden Avenue photo by polychrome