Redlining

Abstract

The residential mortgage activity of financial institutions in metropolitan Boston was analyzed to identify and assess patterns of disinvestment. Data were obtained from most state-chartered institutions and larger national banks on the geographic breakdown of their mortgage portfolios, recent mortgage activities, and deposits. Additional information on home sales, population and housing characteristics, and homeowner interviews were used. The measures of disinvestment were (1) mortgage-to-deposit ratios, (2) number of bank mortgage applications compared to home sales, and (3) bank-financed home sales to total home sales. Results indicate that (1) the mortgage dollars invested relative to the savings dollars deposited by residents were disproportionately low in most urban neighborhoods; (2) the proportion of bank-financed home sales was substantially higher in suburban than in urban areas; and (3) bank home mortgage lending is disproportionately lower in minority and racially changing neighborhoods. These analytical techniques and results are compared with those of major redlining studies in other metropolitan areas.