Evidence on Discrimination in Mortgage Lending
Much of the controversy about whether mortgage lenders discriminate against minorities can be explained in terms of the confusion about how to define discrimination. Based on the legal definition, careful studies of loan denial rates, such as that done by the Federal Reserve Bank of Boston, represent an appropriate method for testing for discrimination by lenders. Based on that study, it is quite clear that lenders discriminate. The fact that minorities have higher default rates on average than whites is irrelevant to the interpretation of the race coefficient in such models. Nonetheless, more research on and discussion about the relationship between the race of the applicant and delinquencies, defaults, and losses would be desirable.
Volume (Year): 12 (1998)
Issue (Month): 2 (Spring)
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- Michael H. Schill & Susan M. Wachter, "undated". "A Tale of Two Cities: Racial and Ethnic Geographic Disparities in Home Mortgage Lending in Boston and Philadelphia," Rodney L. White Center for Financial Research Working Papers 16-93, Wharton School Rodney L. White Center for Financial Research.
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"Housing-finance intervention and private incentives: helping minorities and the poor,"
Federal Reserve Bank of Cleveland, pages 634-678.
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- James A. Berkovec & Glenn B. Canner & Stuart A. Gabriel & Timothy H. Hannan, 1994.
"Race, redlining, and residential mortgage loan performance,"
Federal Reserve Bank of Philadelphia, pages 263-298.
- Berkovec, James A & Canner, Glenn B. & Gabriel, Stuart A. & Hannan, Timothy H., 1994. "Race, Redlining, and Residential Mortgage Loan Performance," The Journal of Real Estate Finance and Economics, Springer, vol. 9(3), pages 263-294, November.
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- William C. Hunter & Mary Beth Walker, 1995. "The cultural affinity hypothesis and mortgage lending decisions," Working Paper Series, Issues in Financial Regulation 95-8, Federal Reserve Bank of Chicago.
- James A. Berkovec & Glenn B. Canner & Stuart A. Gabriel & Timothy H. Hannan, 1998. "Discrimination, Competition, And Loan Performance In Fha Mortgage Lending," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 241-250, May.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
- Munnell, Alicia H. & Geoffrey M. B. Tootell & Lynn E. Browne & James McEneaney, 1996.
"Mortgage Lending in Boston: Interpreting HMDA Data,"
American Economic Review,
American Economic Association, vol. 86(1), pages 25-53, March.
- Alicia H. Munnell, 1992. "Mortgage lending in Boston: interpreting HMDA data," Working Papers 92-7, Federal Reserve Bank of Boston.
- Lynn Elaine Browne & Geoffrey M.B. Tootell, 1995. "Mortgage lending in Boston: a response to the critics," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 53-78.
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