Is Predatory Mortgage Lending Activity Spatially Clustered?

Abstract

U.S. housing policy strengthens the local specificity of capital through support for homeownership and the mortgage lending industry. As access to capital and homeownership rates have grown, predatory lending has emerged as a significant danger to homeowners and their surrounding communities. The geographic distribution is not well understood, likely due to the unavailability of mortgage data to identify instances of predatory lending. This article examines the spatial distribution of predatory lending in Philadelphia, Pennsylvania, using public mortgage and property data. Predatory lending is spatially clustered within the city, suggesting a spatial component of abusive lending patterns not previously addressed. U.S. housing policy and intervention strategies designed to prevent and reduce the incidence of predatory lending should address the spatial aspects of predatory lending to target efforts and prevent weakening local connections between capital and communities.

La política de vivienda de los EE.UU. refuerza la especificidad del capital en lo local con el apoyo a la propiedad de vivienda y al sector de los préstamos hipotecarios. En la medida en que el acceso al capital y las tasas de propiedad de vivienda han crecido, la práctica del financiamiento abusivo ha surgido como un peligro significativo para los propietarios de casas y las comunidades circundantes. Las distribuciones geográficas no se conocen bien, probablemente por la no disponibilidad de datos sobre hipotecas que puedan identificar instancias de financiamiento abusivo. Este artículo examina la distribución de este fenómeno en Filadelfia, Pensilvania, utilizando datos sobre hipoteca pública y propiedad. El financiamiento abusivo se concentra en ciertas partes de la ciudad, lo que sugiere un componente espacial en los patrones de este tipo irregular de financiamiento que antes no se había tenido en cuenta. La política de vivienda de los EE.UU. y las estrategias de intervención diseñadas para prevenir y reducir la incidencia del financiamiento abusivo deben tomar en consideración los aspectos espaciales del fenómeno para enfocar bien los esfuerzos y prevenir el debilitamiento de las conexiones locales entre el capital y las comunidades.

Key Words:

• homeownership housing policy
• mortgages
• Philadelphia
• predatory lending

关键词:

• 住宅自有的房屋政策
• 抵押
• 费城
• 掠夺性贷款

Palabras clave:

• política de vivienda en propiedad
• hipotecas
• Filadelfia
• financiamiento abusivo

Notes

1. The term redlining has a literal and symbolic definition: In the literal definition, banks drew red lines on maps to signify the neighborhoods in which they were not going to lend; symbolically, redlining refers to geographic differences between neighborhoods, in terms of the process and outcomes of the mortgage market.

2. The percentage unemployed reflects the portion of the population over age sixteen years old in the civilian workforce who were unemployed at the time of the Census.

3. Median family income and median housing value from 1990 were adjusted for inflation to 2000 dollar values using the Consumer Price Index.

4. The vacant other variable captures housing units that are considered to be inhabitable but are not occupied. This excludes housing units on the market for rent or purchase and seasonal homes, and likely captures abandoned housing.

5. The CrimeStat program was used to conduct the nearest neighbor cluster analysis (see Levine 2004).

6. Results were reported based on Levene's test for equality of variances, a test of homogeneity or whether one variable's variance is the same as that of another variable. If Levene's test had significance greater than 0.05, then I assume that the variances were the same and report the results.