Search Results
Working Paper
Government Litigation Risk and the Decline in Low-Income Mortgage Lending
We study the effect of Department of Justice lawsuits in the 2010s against large lenders for alleged fraud in the Federal Housing Administration (FHA) mortgage insurance program. The suits led to more than $5 billion in settlements and caused targeted banks and their peers to precipitously exit the FHA market. Difference-in-differences and triple differences tests exploiting geographic variation in exposure to exiting banks show a 20 percent reduction in FHA lending in heavily exposed areas. This reduction was not associated with improved underwriting standards or lower default rates. Large ...
Working Paper
Basic Facts on the Coverage of the Paycheck Protection Program
This paper applies loan-level information from Paycheck Protection Program loans to analyze the coverage of this extraordinary lending program. We show that loans went to a large share of small businesses across most industries in the US, especially to industries that were most negatively impacted by COVID-19 stay-at-home orders. We geocode the loans and then identify that 2021 loans were more concentrated in low- and moderate-income communities, along with census tracts where minority residents are a majority of the population. The growth of nonemployer loans and fintech lending in the ...
Working Paper
Does Banking Consolidation Harm Households?
No, in the mortgage market. Using confidential micro-level data combining mortgage contracts with credit and repayment records for 44 million loans spanning 5,000 bank mergers over nearly three decades, we find no changes to mortgage rates, approval rates, or delinquency rates. Local mortgage markets remain remarkably competitive despite consolidation, averaging over 100 active lenders in each county every post-merger quarter. Our findings reveal significant merger selection motives: large acquiring banks target community banks with relationship-intensive, portfolio-lending business models, ...
Speech
Welcoming Remarks: 2025 Crossing the Credit Barrier Conference
St. Louis Fed President Alberto Musalem gave welcoming remarks to open the two-day conference. Held at the St. Louis Fed, the conference was co-sponsored by the Federal Reserve Banks of Boston, Philadelphia and Richmond.
Journal Article
The Determinants of Mortgage Denial
We analyze over 30 million home purchase mortgage applications from 2018–2024 using publicly available Home Mortgage Disclosure Act (HMDA) data to study the determinants of mortgage denial. We establish three primary findings. First, credit access is highly sensitive to monetary policy; the 2022–2023 tightening drove aggregate denial rates from 12.2% to 15.7% via the debt-to-income (DTI) channel. Second, we identify a critical nonlinearity in underwriting: While the 43% qualified mortgage (QM) threshold—below which lenders receive legal safe harbor from ability-to-repay claims—is ...
Working Paper
The Determinants of Mortgage Denial Using Public Data
We analyze over 30 million home purchase mortgage applications from 2018-2024 using publicly available Home Mortgage Disclosure Act (HMDA) data to study the determinants of mortgage denial. We establish three primary findings. First, credit access is highly sensitive to monetary policy; the 2022-2023 tightening drove aggregate denial rates from 12.2% to 15.7% via the debt-to-income (DTI) channel. Second, we identify a critical nonlinearity in underwriting: While the 43% qualified mortgage (QM) threshold---below which lenders receive legal safe harbor from ability-to-repay claims---is ...
Discussion Paper
Introducing the SCE Credit Access Survey
Today, we are releasing new data on consumers? experiences and expectations regarding credit demand. We?ve been collecting these data every four months since mid-2013, as part of our Survey of Consumer Expectations (SCE). Other data sources describing consumer credit either provide aggregates that are an interaction of credit supply and demand (such as the FRBNY Consumer Credit Panel), or show only short-term changes in supply and demand (as reported by the supply side in the Senior Loan Officer Opinion Survey), or are too infrequent to provide a real-time picture of changes in consumer ...
Discussion Paper
Trends in Debt Concentration in the United States By Income
Household debt in the United States expanded before the Great Recession, contracted afterward, and has been recovering since 2013. But how has the distribution of debt across different income groups evolved over time? Who has been driving the recovery of household debt over the past two years? To date, there has been little work on how borrowing patterns for high- and low-income individuals have changed over time, although one notable exception is Amromin and McGranahan. Here, using the New York Fed Consumer Credit Panel (CCP), a quarterly panel data set based on Equifax credit reports, we ...
Discussion Paper
Just Released: A Closer Look at Recent Tightening in Consumer Credit
The Federal Reserve Bank of New York released results today from its October 2018 SCE Credit Access Survey, which provides information on consumers' experiences with and expectations about credit demand and credit access. The survey is fielded every four months and was previously fielded in June.
Discussion Paper
Who Has Been Evicted and Why?
More than two million American households are at risk of eviction every year. Evictions have been found to cause prolonged homelessness, worsened health conditions, and lack of credit access. During the COVID-19 outbreak, governments at all levels implemented eviction moratoriums to keep renters in their homes. As these moratoriums and enhanced income supports for unemployed workers come to an end, the possibility of a wave of evictions in the second half of the year is drawing increased attention. Despite the importance of evictions and related policies, very few economic studies have been ...