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Working Paper
Redlining in Boston: do mortgage lenders discriminate against neighborhoods?
Historically, lenders have been accused of "redlining" minority neighborhoods as well as refusing to lend to minority applicants. Considerable bank regulation is designed to prevent both actions. However, the strong correlation between race and neighborhood makes it difficult to distinguish the impact of geographic discrimination from the effects of racial discrimination. Previous studies have failed to untangle these two influences, in part, because of severe omitted variable bias. The data set in this paper allows the distinct effects of race and geography to be identified, and it shows ...
Working Paper
Can studies of application denials and mortgage defaults uncover taste-based discrimination?
Several articles in the popular press have asserted that a simple comparison of average mortgage default rates for white and minority applicants is necessary and sufficient to uncover discrimination in mortgage lending. The fallacy of this assertion has been examined in Peterson (1981), Tootell (1993), and Yinger (1993). These papers show that a failure to account for the financial characteristics of each application or loan makes a simple comparison of average rates meaningless. However, recent empirical work on discrimination in mortgage lending has examined both application denial and ...
Working Paper
Underserved mortgage markets: evidence from HMDA data
A baseline evaluation of the variation in mortgage credit flows across different types of neighborhoods using HMDA data collected in 1990 and 1991.
Discussion Paper
The homeownership and financing experience in two Chicago minority neighborhoods
This article documents the homeownership and financing decisions made by Hispanic and Black households in two Chicago ethnic communities to help policy makers, financial institutions and community leaders better understand the homeownership process for these two minority groups. Based on our findings, several policy initiatives and programs are proposed to improve the quality of financial literacy and ultimately for Hispanic and Black households.
Report
Subprime mortgage pricing: the impact of race, ethnicity, and gender on the cost of borrowing
Some observers have argued that minority borrowers and neighborhoods were targeted for expensive credit in 2004-06, the peak period for subprime lending. To investigate this claim, we take advantage of a new data set that merges demographic information on subprime borrowers with information on the mortgages they took out. In a sample of more than 75,000 adjustable-rate mortgages, we find no evidence of adverse pricing by race, ethnicity, or gender in either the initial rate or the reset margin. Indeed, if any pricing differential exists, minority borrowers appear to pay slightly lower rates, ...
Conference Paper
Mortgage discrimination and FHA loan performance