Mortgage Discrimination: Paperwork and Prohibitions Prove Insufficient-Is it Time for Simplification and Incentives
![handle is hein.journals/hoflr21 and id is 615 raw text is: MORTGAGE DISCRIMINATION: PAPERWORK
AND PROHIBITIONS PROVE
INSUFFICIENT-IS IT TIME FOR
SIMPLIFICATION AND INCENTIVES?
Robert G. Boehmer*
I. INTRODUCTION
Racial discrimination in United States mortgage lending has, for
far too long, burdened both those subjected to it and the society'
which must accept its inevitable and negative consequences.2 Such
* Assistant Professor of Legal Studies, Terry College of Business, University of
Georgia. B.S., University of Oregon School of Business, 1974; J.D., University of Oregon
School of Law, 1977.
1. See generally Mortgage Discrimination: Hearing Before the Subcomm. on Consumer
and Regulatory Affairs of the Senate Comm. on Banking, Housing, and Urban Affairs, 101st
Cong., 2d Sess. 1 (1990) [hereinafter Mortgage Discrimination Hearings II] (statement of Sen.
Dixon, Chairman of the Subcommittee, opening the hearing) (I was greatly troubled by the
statistics which showed that blacks in minority neighborhoods got fewer loans and got
rejected for loans more often than whites in white neighborhoods, even when incomes were
comparable.); Discrimination in Home Mortgage Lending: Hearing Before the Subcomm. on
Consumer and Regulatory Affairs of the Senate Comm. on Banking, Housing, and Urban
Affairs, 101st Cong., Ist Sess. 2 (1989) [hereinafter Mortgage Discrimination Hearings 11
(statement of Sen. Dixon, opening the hearing) ('I]t's 21 years since passage of the Fair
Housing Act. Fifteen years since the Equal Credit Opportunity Act was passed in the Con-
gress; and 11 years since the Community Reinvestment Act became the law of this land, and
still we have discrimination in lending.); Dan Gillmor & Stephen K. Doig, Segregation
Forever?, AMI. DEMOGRAPHICS, Jan. 1992, at 48, 48 (More than 25 years have passed since
the Civil Rights Act of 1964 outlawed racial discrimination in housing. Yet data from the
1990 census show black-white segregation is still a fact of life in America.).
2. Jane McGrew et al., Fair Housing: An Agenda for the Washington Lawyer's Com-
mittee for Civil Rights, 27 HOW. L.J. 1291, 1304-06 (1984). McGrew found that:
As of the late 1960's and through the mid 1970's, redlining was indisput-
ably a common, if not universal, practice among lending institutions in urban areas
of the country. Lenders attempted to justify their actions as being a necessary part
of their fiduciary obligation to depositors to minimize risk. While lenders claimed
that redlining occurred only after a neighborhood had already begun to decline,
redlining came to be recognized as a major cause of urban neighborhood decline,
as well as an effect. The refusal of lenders to invest in redlined neighborhoods has
been found to contribute to a pattern of decline, including the inability of owners
to maintain their property, the transformation of neighborhoods from owner-occu-
pied areas to rental areas, and intensified segregation. In addition, when loans are](ViewImageLocal?handle=hein.journals/hoflr21&div=26&collection=&method=preview&ext=.png&size=3)
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Mortgage Discrimination: Paperwork and Prohibitions Prove Insufficient-Is it Time for Simplification and Incentives
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