17. The Subprime State of Race

  1. Susan J. Smith Mistress Professor Director Fellow Editor-in-Chief2 and
  2. Beverley A. Searle PhD Lecturer3
  1. Elvin K. Wyly Associate Professor Chair

Published Online: 29 APR 2010

DOI: 10.1002/9781444317978.ch17

The Blackwell Companion to the Economics of Housing: The Housing Wealth of Nations

The Blackwell Companion to the Economics of Housing: The Housing Wealth of Nations

How to Cite

Wyly, E. K. (2010) The Subprime State of Race, in The Blackwell Companion to the Economics of Housing: The Housing Wealth of Nations (eds S. J. Smith and B. A. Searle), Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781444317978.ch17

Editor Information

  1. 2

    University of Cambridge, UK

  2. 3

    Durham University, UK

Author Information

  1. University of British Columbia, Canada

Publication History

  1. Published Online: 29 APR 2010
  2. Published Print: 12 MAR 2010

ISBN Information

Print ISBN: 9781405192156

Online ISBN: 9781444317978

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Keywords:

  • Home Mortgage Disclosure Act (HMDA);
  • housing finance;
  • racial inequalities;
  • racialization;
  • subprime mortgage lending

Summary

To help understand how and why racial inequalities persist in housing finance, this chapter provides, an analysis of how the subprime “miracle” turned into a racist mirage, and secondly, a theoretical interpretation of risky credit as a product of changes in America’s “racial state.” The chapter proposes three hypotheses regarding the racialization of subprime mortgage lending. These hypotheses are tested against an empirical analysis of race-class inequalities and institutional structures using a series of matched borrower- and lender-level databases compiled from the 2004, 2005, and 2006 Home Mortgage Disclosure Act (HMDA) records. This analysis includes descriptive tabulations and graphics, as well as a conventional econometric analysis to control for demand-side factors. The chapter offers a theoretical interpretation of these findings drawing on Omi and Winant’s (1994) notion of the “racial state.”.

Controlled Vocabulary Terms

Credit risk; Econometric analysis; housing; Mortgage loan