Applying for home mortgages in immigrant communities: the case of Asian applicants in Los Angeles
In this paper it is argued that the spatial segmentation of financial services in urban areas, generated by a combination of financial market characteristics, transnational movements of people and capital, cultural practices, ethnic resources, and social networks may produce, at the early stages of the home mortgage application process, a sorting of Asian borrowers into mortgage channels that may differ from those of other minority groups and may have, in the long run, a different impact on the exposure and vulnerability of borrowers to adverse lending practices and products. The study employs multinomial logistic regression and GIS analysis of annual Home Mortgage Disclosure Data and explores trends in home mortgage loan applications to different types of lenders by Asian, white, and other minority prospective borrowers in the Los Angeles Metropolitan Area. Findings indicate that Asian applicants feature a greater propensity to apply for mortgage loans at very large mainstream banks and Asian-owned banks than at subprime lenders compared with other minority prospective borrowers. The larger presence of competing financial institutions in Asian immigrant markets may result in a greater access by Asian prospective borrowers to more options and, possibly, to higher quality and affordable mortgage products than other pools of minority applicants. At the same time, some of the social and cultural resources typically found in ethnic enclaves may affect how Asian applicants react to the outreach practices, sorting procedures, and products offered by different lenders. Keywords:� home mortgage lending, immigrants, ethnic banks, Asians
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