Residential Segregation 18 Flashcards
What is securitization?
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds.
Who was more likely to receive a subprime loan, blacks or whites? And what were the controls?
Blacks. Compared with whites with similar credit profiles, down payment ratios, personal characteristics, and residential locations, blacks were more likely to receive subprime loans. (Rugh & Massey 2010).
After controlling for background factors, black and Hispanic homeowners were significantly more likely than whites to receive loans with what?
Unfavorable terms such as prepayment penalties, higher cost ratios, and higher rate spreads (Rugh & Massey 2010).
What effect does a greater degree of Hispanic and especially black segregation in MSA do to the number and rate of foreclosures it experiences?
It increases them (Rugh & Massey 2010)
Segregation’s explanatory power exceeds which factors that have hitherto been identified as key causes of the foreclosure crisis?
Overbuilding, excessive subprime lending, housing price inflation, and lenders’ failure to adequately evaluate borrowers’ creditworthiness. (Rugh & Massey 2010)
