Minority Mortgage Meltdown in Atlanta Metropolis
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Here's another paper on the role of diversity in the mortgage meltdown:

Analyzing Determinants of Foreclosure of Middle-Income Borrowers of Color in the Atlanta, GA Metropolitan Area 

Katrin B. Anacker
George Mason University - School of Public Policy 

James H. Carr
Federal National Mortgage Association (Fannie Mae) 

Archana Pradhan
National Community Reinvestment Coalition (NCRC) 

July 14, 2012
GMU School of Public Policy Research Paper No. 2013-01  


Foreclosures have disproportionately affected borrowers and communities of color. Many studies have concentrated on the nation and specific metropolitan areas, but few academic studies have focused on Atlanta. Using a merged data set consisting of Home Mortgage Disclosure Act (HMDA), U.S. Census, and Lender Processing Services (LPS) data and utilizing a logistic regression model, we analyze the likelihood of foreclosure in the Atlanta, GA metropolitan area. We find that African American borrowers are 52 percent and Hispanic borrowers 159 percent more likely to go into foreclosure, controlling for key financial variables. We also find that African American middle-income borrowers are 35 percent more likely to go into foreclosure. Moreover, we find that exotic mortgage products, such as balloon mortgages, adjustable rate mortgages (ARMs) and mortgages with a prepayment penalty have a higher likelihood of foreclosure than standard 30-year fixed rate mortgages.

The raw, unadjusted results for the large Atlanta metropolitan area are that foreclosure percentages were:

  • White: 1.74% (5,692 homes in foreclosure)
  • Hispanic: 4.65% (2.7X white rate — 395 homes in foreclosure)
  • Black: 5.82%  (3.3X white rate - 8,271 homes in foreclosure)
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