Background
African Americans and other minorities found it nearly impossible to secure mortgages for property located in redlined zones. The systematic denial of loans was a major contributor to the urban decay that plagued many American cities during this time period. Minorities who tried to buy homes continued to face direct discrimination from lending institutions into the late 1990s. The disparities are not simply due to differences in creditworthiness. With other factors held constant, rejection rates for Black and Hispanic applicants was about 1.6 times that for Whites in 1995. Fairness in lending was improved by the Home Mortgage Disclosure Act, passed in 1975. It requires banks to disclose their lending practices in the communities they serve. In the 1970s, the private sector fight against mortgage discrimination began to be led by community development banks, such as ShoreBank in Chicago.
Read more about this topic: Mortgage Discrimination
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