The gender distribution of bad home-loans

Although it has taken me long enough to get to it:

There was a time when purchasing a home was something only married couples did. However, increasingly, single, widowed, and divorced women with and without children are making the choice to purchase a home on their own. Yet, the economic and social consequences of subprime lending practices on them are subjects few are discussing.

Women have become a key component in the real estate market. Last year in Massachusetts, over one-third of first-time home buyers were single women and nearly one-quarter of all home buyers were single women.

Women borrowers are overrepresented in the subprime lending market according to studies done by both the Consumer Federation of America and the National Community Reinvestment Coalition. Across the economic spectrum, women receive less favorable terms than similarly situated men on home purchase, refinance, and home improvement loans. The studies also show that the gap between women and men receiving subprime loans actually increases as women’s income increases.

Elderly women are prime targets of refinance and home improvement subprime lenders. Women on average live longer than men and have a greater chance of living alone. Rising property taxes and medical expenses make older women on fixed incomes particularly susceptible to lenders who promise money for necessary repairs, but instead exact huge fees and charge inflated interest rates.

African-American women, who represent half of African-American home purchase borrowers, are particularly vulnerable. In fact, there is evidence that subprime lenders charge black women and Latinas higher rates and fees than same-race men and white men, again, regardless of income and across all loan types.

For women, the impact of problems in the lending industry crosses age, class, and racial lines as well as neighborhoods.

The primer from the Consumer Federation of America <a href=”National Community Reinvestment Coalition“>can be found here.

African American and Latino women had the highest incidences of subprime lending – and the gap between women of color and white men increased as incomes rose. African American women earning double the area median income were nearly five times more likely to receive subprime home purchase mortgages than white men with similar incomes and Latino women earning twice the area median income were about four times more likely to receive subprime purchase mortgages than white men with similar earnings.

African American women make up half the African American purchase mortgage borrowers and Latino women make up nearly a third of Latino home purchase mortgage borrowers.

I didn’t find the same from the National Community Reinvestment Coalition. The first one is also listed as released December 2006: I wonder if either the problem has declined, or if everyone else has basically caught up in the catching-shit-stakes.

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1 comment so far

  1. 1st Time Home Buyers on

    there are a lot of single people purchasing homes with the MyCommunity and HomePossible mortgage programs. It’s weird that the single ppl generally buy within their means while the married couples buy above their means


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