The present report is the fourth in the annual series begun by that initial study; it extends the time period covered through 2002, and expands the number of individual cities and towns for which data on subprime refinance lending are provided to 108.
Although motivated by a concern with predatory lending, this study and its predecessors – like all of the other quantitative studies of which I am aware – analyzes and reports on lending by subprime lenders. It is therefore important to emphasize that although all predatory loans are subprime, only a fraction of subprime loans are predatory. While predatory loans are by their nature abusive and harmful to borrowers, responsible subprime lending can provide a useful service. Subprime lenders can do this by making credit available to borrowers who might not otherwise be able to obtain it, at a somewhat higher cost that bears a reasonable relationship to the increased expenses and risks borne by the lender. Nevertheless, the existence of high levels of subprime lending in certain types of neighborhoods or among certain groups of borrowers indicates that these neighborhoods or borrowers are more likely to be targeted by predatory lenders and more vulnerable to being exploited by them.
While acknowledging this very important distinction, the present study attempts to shed light on the problem of predatory lending – an unknown portion of total subprime lending – by examining data on lending by subprime lenders. The reason is very simple: systematic data on predatory lending are not available, but data on lending by subprime lenders are.
Campen, Jim, "Borrowing Trouble? IV: Subprime Mortgage Refinance Lending in Greater Boston, 2000-2002" (2004). Gastón Institute Publications. 126.