Is Predatory Mortgage Lending Activity Spatially Clustered?

Abstract

U.S. housing policy strengthens the local specificity of capital through support for homeownership and the mortgage lending industry. As access to capital and homeownership rates have grown, predatory lending has emerged as a significant danger to homeowners and their surrounding communities. The geographic distribution is not well understood, likely due to the unavailability of mortgage data to identify instances of predatory lending. This article examines the spatial distribution of predatory lending in Philadelphia, Pennsylvania, using public mortgage and property data. Predatory lending is spatially clustered within the city, suggesting a spatial component of abusive lending patterns not previously addressed. U.S. housing policy and intervention strategies designed to prevent and reduce the incidence of predatory lending should address the spatial aspects of predatory lending to target efforts and prevent weakening local connections between capital and communities.