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Racial Stratification Among Latinos in the Mortgage Market

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Abstract

Studies of the mortgage industry’s impact on racial stratification have long focused on racial disparities found between white and black homeowners. Ample research demonstrates that unequal access and treatment between white and black home seekers has created major differences in the type of loan products they are offered in the marketplace. While numerous studies also document disadvantaged Latino homebuyers, studies have yet to examine racial variation within the Latino population. This paper draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2010 to 2017 to assess variation in racial disparities among Latinos in loan outcomes and compares them to Non-Latino whites, blacks, Asians, and Others. I show that loan rejections and high cost originations are highest among black Latinos and lowest among white and Asian Latinos. Other Latinos perform somewhere in the middle. These trends are particularly true when examining mortgage denials. When comparing Latino racial groups to Non-Latinos, the observed lending patterns provide evidence of a tri-racial hierarchy in the mortgage market.

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America's major urban centers are becoming increasingly multiethnic. Despite this increase in racial and ethnic diversity, extreme Black-White residential segregation remains the common pattern. As one of the most racially, ethnically, and culturally diverse cities in the world - and one of the most residentially segregated - Los Angeles represents the changing face of urban America. A multiracial sample of adults (N = 4025) is employed to examine neighborhood racial composition preferences - an important, individual-level explanation for residential segregation - and address three shortcomings in existing research. First, I assess composition preferences in a multiracial manner with an innovative replication and expansion of the Farley-Schuman showcard methodology used in the 1976 and 1992 Detroit Area studies. Second, I extend analysis of the cause of preferences beyond racial stereotypes to include parenting, homeownership, perceptions of social class difference, and common fate identity. Third, I test, directly, the effects of these factors on preferences for same-race neighbors. Results lend strong support to race-based explanations of preferences. As stereotypes toward out-groups become more negative, preferences for integration decrease: Blacks are consistently perceived in unfavorable terms, and are, consensually, the least preferred out-qroup neighbors. There is also limited support for so-called class-based explanations of preferences; homeowners prefer fewer Black neighbors. Generally, results suggest both greater resistance to integration with Blacks titan previously thought, but more openness to integration than currently exists.
Article
Theories of metropolitan development in the United States explain that higher status populations tend to occupy newer housing while lower status groups tend to be restricted to older housing. The housing system thus reflects the broader stratification structure and likely changes in response to important shifts like the steep rise of income inequality at the end of the twentieth century. Indeed, a striking trend of increasingly large houses with many amenities emerged in U.S. metropolitan areas during this period, indicating that new construction may have become ever more exclusive and targeted to the affluent as inequality rose. In this article, I investigate whether the stratifying impact of new house construction intensified along with growing inequality and changing house structures using a variety of U.S. Census Bureau sources, examining both trends in the income level of new house buyers and the relationship of housing growth to affluent residential segregation. I find striking evidence that new housing did become much more dominated by the affluent, and was increasingly stratifying and segregating at the end of the twentieth century. These changes may exacerbate inequality in the future through opportunity structures linked to place of residence, including access to education and the accumulation of housing equity.
Article
In this article I argue that the bi-racial order (white vs non-white) typical of the United States is undergoing a profound transformation. Because of drastic changes in the demography of the nation as well as changes in the racial structure of the world-system, the United States is developing a complex, Latin America-like racial order. Specifically, I suggest that the new order will have two central features: three loosely organized racial strata (white, honorary white, and the collective black) and a pigmentocratic logic. I examine some objective, subjective, and social interaction indicators to assess if the Latin Americanization thesis holds some water. Although more refined data are needed to conclusively make my case, the available indicators support my thesis. I conclude this article by outlining some of the potential implications of Latin Americanization for the future of race relations in the United States.
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In the millennium's inaugural decade, 2 interrelated trends influenced research on America's families of color: the need for new knowledge about America's growing ethnic/racial minority and immigrant populations and conceptual advances in critical race theories and perspectives on colorism. Three substantive areas reflecting researchers' interests in these trends emerged as the most frequently studied topics about families of color: inequality and socioeconomic mobility within and across families, interracial romantic pairings, and the racial socialization of children. In this review, we synthesize and critique the decade's scholarly literature on these topics. We devote special attention to advances in knowledge made by family-relevant research that incorporated ways of thinking from critical race theories and the conceptual discourse on colorism.
Article
Wealth inequality, particularly in housing, has received increased attention in recent years for its importance to racial and ethnic stratification. Yet, while we know a fair amount about black-white wealth inequality, many questions remain regarding sources of Hispanic asset inequality. This article addresses this gap by examining racial and ethnic inequality in homeownership and housing equity among the pre-retirement population. Results support a stratification perspective of inequality for both blacks and Hispanics; even after accounting for numerous life-cycle, resource, and social-psychological considerations, blacks and Hispanics continue to lag significantly behind whites in housing wealth. While Hispanics initially appear better off than blacks with respect to housing, this is largely a function of their more favorable family structure. Important differences between blacks and Hispanics in the main contributors to housing inequality highlight the need to take a more multiethnic perspective on wealth stratification.
Article
Immigrants represent an increasingly vital component of the U.S. housing market, though there is a substantial and growing gap in homeownership rates between natives and the foreign born. We employ the New Immigrant Survey-2003 to examine the housing tenure of immigrants recently adjusted to new legal permanent resident status. The results reveal important cross-national differences in the linkages between transfers to the origin country, relationships with U.S. mainstream financial institutions, previous unauthorized experience, and housing tenure. Analyses also document that immigrants occupy three distinct housing outcomes in America; renting, owning, and living for free.