The color of credit

"In this book Stephen Ross and John Yinger discuss what has been learned about mortgage-lending discrimination in recent years. They reanalyze existing loan-approval and loan-performance data and devise new tests for detecting discrimination in contemporary mortgage markets.

They provide an in-depth review of the 1996 Boston Fed Study and its critics, along with new evidence that the minority-white loan-approval disparities in the Boston data represent discrimination, not variation in underwriting standards that can be justified on business grounds. Their analysis also reveals several major weaknesses in the current fair-lending enforcement system, namely, that it entirely overlooks one of the two main types of discrimination [disparate impact], misses many cases of the other main type [disparate treatment], and insulates some discriminating lenders from investigation.

Ross and Yinger devise new procedures to overcome these weaknesses and show how the procedures can also be applied to discrimination in loan-pricing and credit-scoring."--BOOK JACKET.