University of Baltimore Law ScholarWorks@University of Baltimore School of Law All Faculty Scholarship Faculty Scholarship Spring 2011 "On the Take": The lB ack Box of Credit Scoring and Mortgage Discrimination Cassandra Jones Havard University of Baltimore School of Law,
[email protected] Follow this and additional works at: http://scholarworks.law.ubalt.edu/all_fac Part of the Banking and Finance Law Commons, Civil Rights and Discrimination Commons, Property Law and Real Estate Commons, and the Social Welfare Law Commons Recommended Citation "On the Take": The lB ack Box of Credit Scoring and Mortgage Discrimination, 20 B.U. Pub. Int. L.J. 241 (2011) This Article is brought to you for free and open access by the Faculty Scholarship at ScholarWorks@University of Baltimore School of Law. It has been accepted for inclusion in All Faculty Scholarship by an authorized administrator of ScholarWorks@University of Baltimore School of Law. For more information, please contact
[email protected]. "ON THE TAKE": THE BLACK BOX OF CREDIT SCORING AND MORTGAGE DISCRIMINATION CASSANDRA JONES HA V ARD* ABSTRACT Subprime credit, a relatively new method of risk-based pricing, has been hailed as a way to open-up markets and provide credit to those who would otherwise be excluded. However, evidence suggests that subprime mortgage segmentation increases, rather than reduces, exclusionary practices in lending. Furthermore, it is unclear how lenders determine who qualifies as a subprime borrower. This concern became apparent when studies demonstrated that mi nority borrowers, regardless of creditworthiness, are more likely to receive ex pensive, subprime loans. The disparity is properly attributed to lenders' credit pricing policies.