Search Results

Showing results 1 to 10 of approximately 27.

(refine search)
SORT BY: PREVIOUS / NEXT
Author:Bhutta, Neil 

Working Paper
Giving credit where credit is due? the Community Reinvestment Act and mortgage lending in lower-income neighborhoods

I identify and quantify the mortgage supply effect of the Community Reinvestment Act (CRA), a law mandating that banks help provide credit in lower-income neighborhoods, by exploiting a discontinuity in the selection rule determining which census tracts CRA targets. Using a comprehensive source of micro data on MSA mortgage applications, I find that CRA affects bank lending primarily in large MSA's, where banks are most scrutinized. The analysis indicates that CRA's effect on bank originations was about 4% between 1994 and 1996, and expanded to 8% in 1997-2002, consistent with the timing of a ...
Finance and Economics Discussion Series , Paper 2008-61

Working Paper
Do Minorities Pay More for Mortgages?

We test for racial discrimination in the prices charged by mortgage lenders. We construct a unique dataset where we observe all three dimensions of a mortgage's price: the interest rate, discount points, and fees. While we find statistically significant gaps by race and ethnicity in interest rates, these gaps are offset by differences in discount points. We trace out point-rate schedules and show that minorities and whites face identical schedules, but sort to different locations on the schedule. Such sorting may reflect systematic differences in liquidity or preferences. Finally, we find no ...
Finance and Economics Discussion Series , Paper 2020-007

Working Paper
The depth of negative equity and mortgage default decisions

A central question in the literature on mortgage default is at what point underwater homeowners walk away from their homes even if they can afford to pay. We study borrowers from Arizona, California, Florida, and Nevada who purchased homes in 2006 using non-prime mortgages with 100 percent financing. Almost 80 percent of these borrowers default by the end of the observation period in September 2009. After distinguishing between defaults induced by job losses and other income shocks from those induced purely by negative equity, we find that the median borrower does not strategically default ...
Finance and Economics Discussion Series , Paper 2010-35

Working Paper
The Effect of Interest Rates on Home Buying : Evidence from a Discontinuity in Mortgage Insurance Premiums

We study the effect of interest rates on the housing market by taking advantage of a sudden and unexpected price change in a large government mortgage program. The Federal Housing Administration (FHA) insures most mortgages to lower-downpayment, lower credit score borrowers, including a majority of first-time homebuyers. The FHA charges borrowers an annual mortgage insurance premium (MIP), and in January, 2015 the FHA abruptly reduced the MIP, and thus FHA borrowers? effective interest rate, by 50 basis points. Using a regression discontinuity design, we find that the MIP reduction increased ...
Finance and Economics Discussion Series , Paper 2017-086

Working Paper
Regression discontinuity estimates of the effects of the GSE act of 1992

In this paper I estimate the effect of the Underserved Areas Goal (UAG) established under the ?GSE Act?, a 1992 law mandating that the housing government-sponsored enterprises Fannie Mae and Freddie Mac help promote credit access and homeownership opportunities for low-income households and in low-income and minority neighborhoods. I identify the goal?s impact by taking advantage of a discontinuity in the census tract eligibility rule. Employing local linear and non-parametric regression discontinuity methods, I find that this goal has had a direct effect on GSE purchasing activity of 3-4% ...
Finance and Economics Discussion Series , Paper 2009-03

Working Paper
The ins and outs of mortgage debt during the housing boom and bust

From 1999 to 2013, U.S. mortgage debt doubled and then contracted sharply. Our understanding of the factors driving this volatility in the stock of debt is hampered by a lack of data on mortgage flows. Using comprehensive, individual-level panel data on consumer liabilities, I estimate detailed mortgage inflows and outflows. During the boom, inflows from real estate investors tripled, far outpacing growth from other segments such as first-time homebuyers. During the bust, although defaults and deleveraging are popular explanations for the debt decline, a collapse in inflows has been the major ...
Finance and Economics Discussion Series , Paper 2014-91

Working Paper
Stress Testing Household Debt

We estimate a county-level model of household delinquency and use it to conduct "stress tests" of household debt. Applying house price and unemployment rate shocks from Comprehensive Capital Analysis Review (CCAR) stress tests, we find that forecasted delinquency rates for the recent stock of debt are moderately lower than for the stock of debt before the 2007-09 financial crisis, given the same set of shocks. This decline in expected delinquency rates under stress reflects an improvement in debt-to-income ratios and an increase in the share of debt held by borrowers with relatively high ...
Finance and Economics Discussion Series , Paper 2019-008

Working Paper
Mortgage debt and household deleveraging: accounting for the decline in mortgage debt using consumer credit record data

One of the major reasons hypothesized for the tepid economic recovery thus far is the ongoing "deleveraging" process. From 2009:Q3 to 2011:Q3, aggregate household debt declined by about $1.5 trillion in real terms, with mortgage debt falling by about $1 trillion. Other than defaults, the factors driving the decline in aggregate debt are not precisely understood, in large part because the necessary data are not widely available. This paper draws on panel data consisting of individual credit records to better understand why mortgage debt has declined. I decompose changes in aggregate ...
Finance and Economics Discussion Series , Paper 2012-14

Working Paper
Payday loans and consumer financial health

The annualized interest rate for a payday loan often exceeds 10 times that of a typical credit card, yet this market grew immensely in the 1990s and 2000s, elevating concerns about the risk payday loans pose to consumers and whether payday lenders target minority neighborhoods. This paper employs individual credit record data, and Census data on payday lender store locations, to assess these concerns. Taking advantage of several state law changes since 2006 and, following previous work, within-state-year differences in access arising from proximity to states that allow payday loans, I find ...
Finance and Economics Discussion Series , Paper 2013-81

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 ...
Federal Reserve Bulletin , Volume 98 , Issue Sept

FILTER BY year

FILTER BY Content Type

FILTER BY Jel Classification

G21 2 items

D14 1 items

E37 1 items

E43 1 items

E52 1 items

G01 1 items

show more (8)

PREVIOUS / NEXT