Mortgage Lending and Residential Integration in a Hypersegregated MSA: The Case of St

Summary. Have mortgage lending reform s during the ® rst half of the 1990s been associate d with improvem ents in the home-ownership prospects of black residents? Have the spatial pattern s of loan application s changed, to increase lending activity in lower-incom e tracts and to advance residential integratio n? This paper investigates changes in mortgage lending activity in the St Louis metropolitan area over the period 1990 ± 94. Analysis of Home Mortgage Disclosu re Act (HMDA) data suggests that the home-ownership prospects of black St Louis residents improved over that period, as a result of increases in loan application rates from blacks during the latter half of the period, and of steady improvem ents in loan approval rates for black applican ts. Some increases were seen in the proportion of application s attract ed to lower-incom e tracts. Black loan applicants became more likely to apply for a loan in a predom inantly white tract. A detailed spatial analysis of loan application pattern s suggests that trends towards greater residential integration have accom panied recen t mortgage market reform s. Since 1989, a series of reforms have trans-formed the mortgage-lending industry in the US. While many reforms have been aimed at improving the safety and soundness of feder-ally backed institutions, signi ® cant efforts have also been made to expand credit avail-ability to households and neighbourhoods traditionally underserved by the home lend-ing industry. The Community Reinvestment Act (CRA) of 1977 and the Home Mortgage Disclosure Act (HMDA) of 1976 were both revised in 1989, to increase public scrutiny of lending patterns and to strengthen enforce-ment. Reforms to the government-sponsored secondary mortgage markets in Title XIII o