The role group membership theories play in subprime home mortgage Essay

The reference assembly membership theories routine in subprime home mortgage add - Essay Examplethere is no evidence argue this position of Predatory Lending however, it is the intent of this paper to supply an additional theory to the prevalence of subprime lending to measlyer income families. I postulate that the prevalence of this type of lending is, in part, due to the effects of group memberships.Numerous studies have been conducted over the past decade concerning the prevalence of subprime lending for low income families. The studies have shown that low income families have a higher rate of subprime loans when compared to their middle and upper class counterparts, and that payment history makes teeny-weeny difference. According to the US Department of Housing and Urban Development (2000) Unequal Burden Income and Racial Disparities in Subprime Lending in America, Subprime loans are three times more likely to be found among low-income neighborhoods than in high-income nei ghborhoods - In low-income neighborhoods, subprime loans accounted for 26 percent of total loans in 1998 compared with only 11 percent in moderate-income neighborhoods and vindicatory 7 percent in upper-income neighborhoods (p. 2). In addition, Association of Community Organizations Organized for Reform Now (ACORN), released a study (1999) Financial Apartheid in Mortgage Interest Rates which stated that high cost mortgage financing was disproportionately more prevalent in spurn income borrowers whether it was for home purchase or the refinancing of an vivacious home. The previous statements are what this paper is set to examine from the perspective that group membership plays an integral role in the presence of subprime home mortgage lending to lower income families.The following pages provide a complete description of the subprime home mortgage lending market, the refinancing practices of lenders and a description of what is known as Predatory Lending. later that I will lay o ut group membership theories and describe the attributes of the target group lower income