Search Results
Working Paper
Commercial lending and distance: evidence from Community Reinvestment Act data
Innovations such as credit scoring have increased the ability of banks to lend to distant business borrowers, which could expand the geographic market for small business loans. However, if this effect is limited to a few large banks, the market may become segmented and lending distance at local banks actually decreases. This paper, using a new data source and a spatial econometric model, empirically estimates the relationship between distance and commercial lending and how this relationship is evolving over time. We find distance is negatively associated with the likelihood of a local ...
Journal Article
The 2009 HMDA data: the mortgage market in a time of low interest rates and economic distress
The data that mortgage lending institutions reported for 2009 under the Home Mortgage Disclosure Act of 1975 (HMDA) reflect the ongoing difficulties in the housing and mortgage markets. This article presents a number of key findings from a review of the 2009 HMDA data. In particular, it documents the wave of refinancing but discusses factors that may have muted such opportunities, explores patterns of lending across groups and areas with high rates of foreclosure, highlights the federal government’s greatly expanded role in the mortgage market, and examines how the interest rate ...
Working Paper
Does distance matter in banking?
Deregulation and technological change have reduced the transactions costs that led to the dominance of local financial service suppliers, leading some to question if distance still matters in banking. This debate has been particularly acute in small business banking, where transactions costs are believed to be particularly high. This paper provides a detailed review of the literature on distance in banking markets, highlighting the reasons why geographic proximity is believed to be important and examining the changes that may have affected its importance. Relying on new data from the 2003 ...
Working Paper
Credit where none is due? Authorized user account status and \"piggybacking credit\"
An "authorized user" is a person who is permitted by a revolving account holder to use an account without being legally liable for any charges incurred. The Federal Reserve's Regulation B, which implements the 1974 Equal Credit Opportunity Act, requires that information on spousal authorized user accounts be reported to the credit bureaus and considered when lenders evaluate credit history. Since creditors generally furnish to the credit bureaus information on all authorized user accounts, without indicating which are spouses and which are not, credit scoring modelers cannot distinguish ...
Journal Article
The mortgage market in 2010: highlights from the data reported under the Home Mortgage Disclosure Act
This article presents a number of key findings from a review of the data that mortgage lending institutions reported for 2010 under the Home Mortgage Disclosure Act (HMDA). The article documents home-purchase lending activity reflected in the HMDA data and discusses how the ending of the government's first-time homebuyer tax credit program during the year may have affected such lending. It also documents refinance lending activity and explores factors that may have muted such lending during 2010. In addition, the article closely examines patterns of lending across different racial or ethnic ...
Working Paper
Foreclosure's wake: the credit experiences of individuals following foreclosure
While a substantial literature has examined the causes of mortgage foreclosure, there has been relatively little work on the consequences of foreclosure for the borrowers themselves. Using a large sample of anonymous credit bureau records, observed quarterly from 1999Q1 through 2010Q1, we examine the credit experiences of almost 350,000 borrowers before and after their mortgage foreclosure. Our analysis documents the substantial declines in credit scores that accompany foreclosure and examines the length of time it takes individuals to return their credit scores to pre-delinquency levels. The ...
Journal Article
Higher-priced home lending and the 2005 HMDA data
This article reviews the 2005 HMDA data, which have just been released to the public. The 2004 article covered a wide range of topics, including ways in which the expanded data might be used to aid fair lending enforcement, but this article is more limited: The focus here is primarily on the loan-pricing aspects of the data, including those that permit an assessment of the effects of the changing interest rate situation in 2004 and 2005 on the disclosure of higher-priced lending. To identify the effects on lending patterns of changing interest rates, the analysis presented here uses adjusted ...
Journal Article
The mortgage market in 2011: highlights from the data reported under the Home Mortgage Disclosure Act
This article presents a number of key findings from a review of the data that mortgage lending institutions reported for 2011 under the Home Mortgage Disclosure Act (HMDA). The article documents home-lending activity reflected in the HMDA data and places the 2011 activity in historical context. It also examines changes in mortgage market concentration in recent years and in the credit scores of recent homebuyers. In addition, the article reviews patterns of lending across different racial or ethnic and income groups and across areas that differ in terms of housing market distress. Finally, it ...
Working Paper
The subprime crisis: Is government housing policy to blame?
A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality. We rely on two empirical approaches. In the first approach, which focuses on ...
Journal Article
The 2007 HMDA data