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The Price of Mortgage Financing for Native Americans

Author

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  • Laura Cattaneo

    (University of Minnesota)

  • Donna Feir

    (University of Victoria
    University of Victoria)

Abstract

We demonstrate that mortgage loans made to Native American primary borrowers are systematically more likely to be higher-priced than other mortgage loans. This difference is pronounced for mortgage loans on reservations: 27% of mortgage loans for properties on reservation lands with Native Americans as the primary borrower are higher-priced, while only 8.7% of mortgage loans nearby reservations made to non-Native American borrowers are higher-priced. Conditional on having a higher-priced loan, the rate spread facing Native Americans is also higher than non-Native Americans. These findings come from the 2010 to 2017 Home Mortgage Disclosure Act Data which is the most comprehensive, consistent series of mortgage loan data in the USA. We discuss the factors that may drive these outcomes.

Suggested Citation

  • Laura Cattaneo & Donna Feir, 2021. "The Price of Mortgage Financing for Native Americans," Journal of Economics, Race, and Policy, Springer, vol. 4(4), pages 302-319, December.
    • Handle: RePEc:spr:joerap:v:4:y:2021:i:4:d:10.1007_s41996-020-00069-8
    DOI: 10.1007/s41996-020-00069-8
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    References listed on IDEAS

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    1. Ken Cyree & Keith Harvey & Michael Melton, 2004. "Bank Lending to Native American Applicants: An Investigation of Mortgage Flows and Government Guarantee Programs on Native American Lands," Journal of Financial Services Research, Springer;Western Finance Association, vol. 26(1), pages 29-54, August.
    2. Long, James E & Caudill, Steven B, 1992. "Racial Differences in Homeownership and Housing Wealth, 1970-1986," Economic Inquiry, Western Economic Association International, vol. 30(1), pages 83-100, January.
    3. Brown, James R. & Cookson, J. Anthony & Heimer, Rawley Z., 2019. "Growing up without finance," Journal of Financial Economics, Elsevier, vol. 134(3), pages 591-616.
    4. Donna Feir & Rob Gillezeau, 2018. "Return to the Homeland? The Impact of the Great Recession on Employment Outcomes and Labor Mobility for Native Americans," Journal of Economics, Race, and Policy, Springer, vol. 1(2), pages 60-74, September.
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