DO LENDERS WHO REDLINE MAKE MORE MONEY THAN LENDERS WHO DONT

While it is widely recognized that racial minorities and residents of distressed urban communities experience relatively greater difficulty in obtaining mortgage loans, there is little consensus on the causes o f such lending patterns. This study examines the relationship between lender profitability and the percentage of their loans and loan dollar s that are invested in Milwaukee's central city and to racial minoriti es throughout the metropolitan area. Findings suggest that to understa nd broader industry-wide patterns, it is important to focus on the cha racteristics of lending institutions themselves, particularly those th at yield discriminatory lending patterns, and not solely on the income , credit rating, and other socioeconomic characteristics pertaining to the risk and profitability associated with various population groups and community areas. Policy and research implications that will lead t o a more comprehensive understanding of, and more effective solutions for, urban credit availability or redlining problems are discussed.