Woodrow Wilson School Ph.D. candidate Jacob Rugh and Woodrow Wilson School’s Henry G. Bryant Professor of Sociology and Public Affairs, Douglas Massey, assessed segregation and the American foreclosure crisis. The authors argue that residential segregation created a unique niche of minority clients who were differentially marketed risky subprime loans that were in great demand for use in mortgage-backed securities that could be sold on secondary markets.
“This study is critical to our understanding of the foreclosure crisis since it shows the important and independent role that racial segregation played in the housing bust,” said Rugh.
A special statistical analysis provided strong evidence that the effect of black segregation on foreclosures is causal and not simply a correlation.
“While policy makers understand that the housing crisis affected minorities much more than others, they are quick to attribute this outcome to the personal failures of those losing their homes – poor credit and weaker economic position,” noted Massey. “In fact, something more profound was taking place; institutional racism played a big part in this crisis.”
“Ultimately, the racialization of America’s foreclosure crisis occurred because of a systematic failure to enforce basic civil rights laws in the United States,” the authors write in the article. “In addition to tighter regulation of lending, rating, and securitization practices, greater civil rights enforcement has an important role to play in cleaning up U.S. markets. It is in the nation’s interest for federal authorities to take stronger and more energetic steps to rid U.S. real estate and lending markets of discrimination, not simply to promote a more integrated and just society but to avoid future catastrophic financial losses.”
Douglas Massey’s research focuses on international migration, race and housing, discrimination, education, urban poverty, and Latin America. He is the author, most recently, of Brokered Boundaries: Creating Immigrant Identity in Anti-Immigrant Times (Russell Sage Foundation, 2010), coauthored with Magaly Sanchez. He has also authored Return of the L-Word: A Liberal Vision for the New Century (Princeton University Press, 2005) and Strangers in a Strange Land: Humans in an Urbanizing World (Norton, 2005). Massey currently serves as President of the American Academy of Political and Social Science and is past-President of the American Sociological Association and the Population Association of America. He is a member of the National Academy of Sciences, the American Academy of Arts and Sciences, and the American Philosophical Society. (source: American Sociological Association Press Release)
Editor's Note: The sound of this video is appalling! However, the sound quality should not reflect the quality of this lecture. I wish Professor Massey would do a voice-over or post more of his lectures. There seems to be an inverse relationship with respect to sound technology and the scholarship of the speaker. You can hear the most asinine crap with clarity, yet when it comes to actually LEARNING SOMETHING, the sound man is asleep at the switch. I think it's some kind of conspiracy theory to keep Americans dumb and dumber. The WORST recordings are found in academe. Is microphone technology that far out of the reach of most colleges and universities?
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