Racial Stratification among Latinos in the Mortgage Market

• In Event: 2333 - Latino/as

Abstract

The importance of the mortgage industry’s impact on racial stratification has long focused on racial disparities found between whites and black homeowners. Ample research demonstrates that unequal access and treatment between white and black homebuyers has created major differences in the type of loan products they are offered in the marketplace. However, it is unclear what racial stratification among Latinos is in the mortgage market. This paper draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2010 to 2016 to assess variation in racial disparities among Latinos in loan outcomes associated with the racial composition of the neighborhood. I show that racial disparities in loan outcomes are highest between black Latinos on the one hand and white Latinos and Asian Latinos on the other. Native American and Pacific Island Latinos perform somewhere in the middle. These trends are particularly true when examining high cost lending. The racial disparities found between black and white Latinos also exists when examining mortgage denials. However, the patterns for mortgage denials, amongst Native American, Pacific Island, and Asian Latinos is less clear and differs depending on the particular mortgage denial outcome. The distinct patterns in loan outcomes found among the Latino racial groups provides evidence that the racialization of Latinos is contributing to the overall racial hierarchy in the mortgage market.

Author

• Jose Loya, University of Pennsylvania