Advanced Search
MyIDEAS: Login to save this article or follow this journal

Mortgage lending in Boston: a response to the critics

Contents:

Author Info

  • Lynn Elaine Browne
  • Geoffrey M.B. Tootell

Abstract

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 information did explain much of the difference, after taking account of economic factors the applicant's race still significantly affected the probability of getting a mortgage.> The study has been influential and has caused many institutions to review their lending practices and supervisory agencies to alter their examination procedures. The study has also drawn criticism, with critics claiming that variables have been omitted, the model misspecified, errors made in the data, and information about racial differences in foreclosures ignored. This article provides a detailed rebuttal to these criticisms and shows that even after incorporating the concerns of some of the study's strongest critics, applicants' race as well as economic characteristics affected the probability of getting a mortgage in 1990.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bostonfed.org/economic/neer/neer1995/neer595d.htm
Download Restriction: no

File URL: http://www.bostonfed.org/economic/neer/neer1995/neer595d.pdf
Download Restriction: no

Bibliographic Info

Article provided by Federal Reserve Bank of Boston in its journal New England Economic Review.

Volume (Year): (1995)
Issue (Month): Sep ()
Pages: 53-78

as in new window
Handle: RePEc:fip:fedbne:y:1995:i:sep:p:53-78

Contact details of provider:
Postal: 600 Atlantic Avenue, Boston, Massachusetts 02210
Phone: 617-973-3397
Fax: 617-973-4221
Email:
Web page: http://www.bos.frb.org/
More information through EDIRC

Order Information:
Email:

Related research

Keywords: Boston (Mass.) ; Mortgages ; Discrimination in mortgage loans;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. David G. Blanchflower & Phillip B. Levine & David J. Zimmerman, 1998. "Discrimination in the Small Business Credit Market," NBER Working Papers 6840, National Bureau of Economic Research, Inc.
  2. Paul S. Calem & Stanley D. Longhofer, 2000. "Anatomy of a fair-lending exam: the uses and limitations of statistics," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2000-15, Board of Governors of the Federal Reserve System (U.S.).
  3. Paul S. Calem & Stanley D. Longhofer, 2000. "Anatomy of a fair-lending exam: the uses and limitations of statistics," Working Paper 0003R, Federal Reserve Bank of Cleveland.
  4. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
  5. McKinley Blackburn & Todd Vermilyea, 2006. "A Comparison of Unexplained Racial Disparities in Bank-Level and Market-Level Models of Mortgage Lending," Journal of Financial Services Research, Springer, Springer, vol. 29(2), pages 125-147, April.
  6. Judith Robinson, 2002. "Race, Gender, and Familial Status: Discrimination in One US Mortgage Lending Market," Feminist Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 8(2), pages 63-85.
  7. Judith Clarke & Nilanjana Roy & Marsha Courchane, 2009. "On the robustness of racial discrimination findings in mortgage lending studies," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 41(18), pages 2279-2297.
  8. HAROLD Black & M. Collins & Ken Cyree, 1997. "Do Black-Owned Banks Discriminate against Black Borrowers?," Journal of Financial Services Research, Springer, Springer, vol. 11(1), pages 189-204, February.
  9. Stephen L. Ross, 2003. "What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets," Working papers, University of Connecticut, Department of Economics 2003-21, University of Connecticut, Department of Economics, revised Nov 2003.
  10. Michael Hout & Harvey Rosen, 2000. "Self-Employment, Family Background, and Race," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 670-692.
  11. Stanley D. Longhofer, 1996. "Cultural affinity and mortgage discrimination," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q III, pages 12-24.
  12. Douglas D. Evanoff & Lewis M. Segal, 1996. "CRA and fair lending regulations: resulting trends in mortgage lending," Economic Perspectives, Federal Reserve Bank of Chicago, Federal Reserve Bank of Chicago, issue Nov, pages 19-46.
  13. Jason Dietrich, 2005. "Under-specified Models and Detection of Discrimination: A Case Study of Mortgage Lending," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 31(1), pages 83-105, August.
  14. Block, Walter & Snow, Nicholas & Stringham, Edward, 2008. "Banks, insurance companies, and discrimination," MPRA Paper 26035, University Library of Munich, Germany.
  15. Stanley D. Longhofer & Stephen R. Peters, 1998. "Beneath the rhetoric: clarifying the debate on mortgage lending discrimination," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q IV, pages 2-13.
  16. Stephen L. Ross, 2005. "The Continuing Practice and Impact of Discrimination," Working papers, University of Connecticut, Department of Economics 2005-19, University of Connecticut, Department of Economics, revised Jul 2006.
  17. Cullen Goenner, 2010. "Discrimination and Mortgage Lending in Boston: The Effects of Model Uncertainty," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 40(3), pages 260-285, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:fip:fedbne:y:1995:i:sep:p:53-78. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Catherine Spozio).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.