The Department of Housing and Urban Development plans to make a study of how local governments and neighborhoods taking advantage of loan information from mortgage lending institutions to combat "redlining" and neighborhood decay.
The study will focus on successful use of information on lending supplied by banks and savings and loan associations since passage of the Home Mortgage Disclosure Act of 1975.
The act was passed by the Congress in an effort to call public attention to the practice of "redlining," or refusing to make make loans in certain neighborhoods.
Discrimination against certain parts of a city can also take the form of shorter loan terms, high down payments, limits on the age of a property, higher closing costs and delayed appraisals.
Lenders are now required to reveal their loans by census tract or zip code.
"Armed with this kind of information, local governments and citizens groups can see which institutions are working for their neighborhoods and which are not," HUD said. "The report from this study will allow local neighborhood groups and governments to share their ideas and experiences."
Some communities have already used information resulting from this law for their neighborhood preservation programs. Community Development Block Grant funds can be aimed at redlined areas and private investment can be encouraged through the use of public money for seed capital, tax credits and business loans.
The consultant making the study for HUD will pick out five to 10 cases where communities have made especially good use of loan information in their preservation activities. Case studies will be written showing what groups were involved, what information they received from lending institutions, what use they made of it, what they decided to do and the results.
In addition to the rather detailed case studies, generalized papers on each example will be prepared as guides for other communities.