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, ...
Redlining or red herring?
Mortgage discrimination and FHA loan performance
Mortgage lending in Boston: a response to the critics
Three years ago, the Federal Reserve Bank of Boston released an examination of racial patterns in mortgage denial rates in the Boston area. The study was motivated by newly available data on mortgage applications, showing that black and Hispanic applicants were two to three times as likely to be turned down for mortgages as white applicants. The study gathered all the variables thought to be missing from the HMDA analysis, such as the applicants' debt burdens and credit histories, to see whether these economic factors explained the racial difference in denial rates. Although the additional ...
Making judgments about mortgage lending patterns
A discussion of discrepancies in methods of evaluating evidence on mortgage-lending discrimination in minority and low-income areas, outlining fundamental differences between studies that focus mostly on neighborhood characteristics and regulatory-agency compliance examinations that concentrate on the attributes of individual lenders.
Taking stock of the Community Reinvestment Act
Over the past 25 years, the Community Reinvestment Act has been found to expand access to mortgage credit. But the banking world keeps evolving. Lending gains were strong during the 1990s, yet disparities still exist. This article provides highlights of an important paper that was produced by Harvard University on CRA's silver anniversary.