REDLINING Flashcards
What is redlining, put most simply?
The systematic denial of various services to residents of specific, often racially associated, neighborhoods or communities, either explicitly or through the selective raising of prices.
What is reverse redlining?
Reverse redlining is when a lender or insurer targets nonwhite or blockbusted neighborhoods to charge them more than in a non-redlined neighborhood where there is more competition, only to approve loans or insurance to nonwhite borrowers to artificially restrict the supply of real estate available for loanable funds and charge them higher interest rates.
Who coined the term redlining?
Sociologist John McKnight
What is redlining known as in academic literature?
It falls under the category of credit rationing.
When did redlining begin?
When the US passed the National Housing Act of 1934 it came to the fore and was subsequently bolstered by the establishement of the Federal Housing Administration in 1934 as well.
How did the FHA start redlining?
It was pioneered by Homer Hoyt, the FHA’s Chief Land Economist, as part of an initiative to develop the first underwriting criteria for mortgages.
What is underwriting?
underwriting is the process a lender uses to evaluate the risk of giving credit
What was really the icing on the cake?
In 1935, the Federal Home Loan Bank Board asked the Home Owners’ Loan Corporation to look at about 250 cities and create “residential security maps” to indicate the level of securitu for real estte investments in each city.
Was the HOLC doing this intentionally?
It didnt look like it was a coordinated effort but rather the Home Owners’ Loan Corporation had to adhere to the private sector’s racism.
How did the FHA explicitly contribute tot the practice of redlining?
Private organizations needed to create maps designed to meet the requirements of the FHA’s underwriting manual. The FHA instructed banks to steer clear of areas with “inharmonious racial groups.”
How did the FHA explicitly contribute tot the practice of redlining?
Private organizations needed to create maps designed to meet the requirements of the FHA’s underwriting manual. The FHA instructed banks to steer clear of areas with “inharmonious racial groups” and encouraged munipalities to enact racially restricitive zoning ordinances.
How much in federally insured home loans did African Americans receive between 1945 and 1959?
2% of all federally insured home loans.
Was it only banks and mortgage lenders who were redlining in the mid 20th century?
Property insurance companies were also greatly active in redlining practices after ww2.
What was some action taken in the 70s?
The National People’s Action was founded in 1973 to broaden the fight against divestment. and mortgage redlining in neighborhoods all around the country.
Who was targeted by the NPA?
The Federal Home Loan Bank Board , the governing authority over federally chartered Savings and loan Associations that held at that time the bulk of the country’s home mortgages.
