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How subprime lending emerged in minority neighbourhoods

Jakučionytė, Eglė and Singh, Swapnil (2022) How subprime lending emerged in minority neighbourhoods. LSE Business Review (20 Jan 2022). Blog Entry.

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Abstract

It is a commonly held belief that subprime lenders, who issue loans to risky borrowers, provide credit to high-risk communities that would not be able to get credit from low-risk lenders. Eglė Jakučionytė and Swapnil Singh challenge this view. They show that policy changes introduced in 1995 by US institutions Fannie Mae and Freddie Mac increased securitisation costs for lending in minority neighbourhoods. Prime lenders moved out and, with less competition, subprime lenders managed to enter these minority neighbourhoods with greater ease.

Item Type: Online resource (Blog Entry)
Official URL: https://blogs.lse.ac.uk/businessreview/
Additional Information: © 2022 The Authors
Divisions: LSE
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HT Communities. Classes. Races
H Social Sciences > HG Finance
Date Deposited: 04 Apr 2022 14:12
Last Modified: 04 Apr 2022 14:12
URI: http://eprints.lse.ac.uk/id/eprint/114110

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