Minority mortgage market experiences leading up to and during the financial crisis
Stephen L. Ross 22 August 2014
The foreclosure crisis that followed the subprime crisis has had significant negative consequences for minority homeowners. This column reviews recent evidence in the racial and ethnic differences in high cost loans and in loan performance. Minority homeowners, especially black homebuyers, faced higher price of mortgage credit and had worse credit market outcomes during the crisis. This is largely due to the fact that minority borrowers are especially vulnerable to the economic downturn.
The foreclosure crisis and the growth of subprime lending that preceded the crisis have disproportionately affected low income and minority neighbourhoods (Geradi and Willen 2009, Fisher et al. 2010, Mayer and Pence 2007, Edminston 2009) and have had significant negative consequences for minority homeownership (Geradi and Willen 2009).
Global crisis Poverty and income inequality
subprime crisis, mortgage crisis, creditor discrimination, minority lending
Sovereign debt markets in turbulent times: A view of the European crisis
Fernando A Broner, Aitor Erce, Alberto Martin, Jaume Ventura 23 July 2014
Since 2010, Eurozone periphery countries have faced severe debt problems and falling credit to the private sector. This column interprets these events with a theory that has three main ingredients. First governments can favour domestic creditors. Second, public debt trades in secondary markets so debt holdings shift from foreign to domestic residents. Third, due to private financial frictions, this shift crowds out private investment and growth.
Between the start of the financial crisis in 2007 and late 2009, the Eurozone’s periphery countries saw a substantial reduction in economic growth and an increase in deficits. But their economic performance was, if anything, stronger than that in the core countries. The recessions in the periphery were no deeper than in the core, and financial markets absorbed their increasing public debt as they had done in the past, with non-resident creditors absorbing large portions of the increase.
Europe's nations and regions Global crisis Monetary policy
public debt, Eurozone crisis, Eurozone sovereign debt, creditor discrimination