Discriminating Risk: The U.S. Mortgage Lending Industry in the Twentieth Century

Mortgage lenders, Stuart contends, are embedded in and shape a social context that can best be understood in terms of rules, networks, and the production of space. Stuart’s history of lenders’ risk criteria reveals that they were synthesized from rules of thumb, cultural norms, and untested theories. In addition, his interviews with real estate and lending professionals in the Chicago housing market show us how the criteria are implemented today. Drawing on census and Home Mortgage Disclosure Act data for quantitative support, Stuart concludes with concrete policy proposals that take into account the social structure in which lenders make decisions.

To break the cycle, Stuart correctly suggests that we need to hold GSEs, lenders, regulators, appraisers, and others responsible for correcting disparite EFFECTS, with or without assigning intent to discriminate to any specific actor or group. Whether or not such accountability can or will occur will depend on whether there is political will and a solid understanding of the issues. At least on the latter point, the public is well-served by this book.

The book is well-written in clear and direct prose. Stuart succeeds in avoiding confusing and jargon-laden descriptions. Given the subject matter, this is a real victory for the reader. The book also provides a very useful history of the mortgage lending industry and is recommended for students and activist alike trying to get their heads around a confusing and poorly understood field that has profound impacts on the persistence of racial segregation in the U.S.