Researchers at Princeton say that without segregation, the expansion of these subprime loans, and the subsequent economic crash, couldn’t have happened. Mortgage brokers needed swaths of communities where people met the following criteria: 1) they didn’t already have a home loan, 2) they were used to predatory lending practices, and 3) there weren’t other financial institutions around to clue buyers into the fact that these subprime loans weren’t a good deal.
Segregated communities like those on the South and West sides of Chicago fit these requirements to a T. Segregation put all these vulnerable people in one geographic location. Mortgage lenders didn’t have to hope the right person would stop by their office. They could set up shop in a place where there were thousands of available customers.
But all those poor people should have known they couldn’t afford a house! Stupid people.