Study Raises Specter of Redlining

A community group says minorities in California are twice as likely as whites to have a home loan application denied to them, raising concerns that large lenders have returned to the practice of redlining. The findings are based on Home Mortgage Disclosure Act figures for the calendar year 2008. In a study titled "From Foreclosure to Re-Redlining," the California Reinvestment Coalition used HMDA figures to analyze lending patterns in five California cities. The 45-page report examined the overall drop in prime lending from 2006 to 2008 and claims that lower-cost prime loans fell dramatically in minority neighborhoods during that period as compared to white neighborhoods. Redlining, the practice of denying, discouraging or increasing the cost of banking services to residents on the basis of race or ethnicity, is forbidden by the Community Reinvestment Act of 1977.