Lending Discrimination: Is the Secondary Market Helping to Make the “American Dream” a Reality?

Ronald K. Schuster, Lending Discrimination: Is the Secondary Market Helping to Make the “American Dream” a Reality?, 36 Gonz. L. Rev. 153 (2001).

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What is the “American Dream”? While many scholars have pondered that question,[1] an exact definition is still the subject of much debate. However, if asked, most would agree the American Dream stresses two ideals-material prosperity and human equality.[2] With regards to material prosperity, “owning a a home is one of the primary ways of accumulating wealth in our society.”[3] Thus, it is reasonable to believe that for most Americans, home ownership represents at least part of the material or economic prosperity aspect of the American Dream.

The United States government has taken measures in an effort to allow all Americans the opportunity to realize the economic aspect of the American Dream. One measure is the government’s sponsorship of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). These Government Sponsored Enterprises (“GSEs”) are federally chartered to provide greater liquidity in the primary mortgage market and to ensure that mortgage funds are available to homebuyers at all times throughout the country.[4] Additionally, Congress has taken measures to address the equality aspect of the American Dream. One example of this is the Equal Credit Opportunity Act, which expressly prohibits discrimination based on race, gender, marital status, religion, and national origin in the lending process.[5]… Read more

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