IDEAS home Printed from https://ideas.repec.org/a/jre/issued/v24n22002p129-152.html
   My bibliography  Save this article

The Influence of Bureau Scores, Customized Scores and Judgmental Review on the Bank Underwriting Decision-Making Process

Author

Listed:
  • M. Cary Collins

    () (University of Tennessee, Knoxville, Tennessee 37996)

  • Keith D. Harvey

    () (Boise State University, Boise, Idaho 83706)

  • Peter J. Nigro

    () (The Office of the Comptroller of the Currency, Washington, D.C. 20219)

Abstract

In recent years commercial banks have moved toward automated forms of underwriting. This study employs unique bank loan-level data from a scoring lender to determine whether automated underwriting exhibits a potential ‘‘disparate impact’’ across income strata. The findings indicate that strict application of this custom scoring model leads to higher denial rates for low- to moderate-income borrowers when compared with both a naý¨ve judgmental system and a bureau scoring approach. These results suggest that financial regulators should focus more resources on the evaluation and study of customized scoring models.

Suggested Citation

  • M. Cary Collins & Keith D. Harvey & Peter J. Nigro, 2002. "The Influence of Bureau Scores, Customized Scores and Judgmental Review on the Bank Underwriting Decision-Making Process," Journal of Real Estate Research, American Real Estate Society, vol. 24(2), pages 129-152.
  • Handle: RePEc:jre:issued:v:24:n:2:2002:p:129-152
    as

    Download full text from publisher

    File URL: http://pages.jh.edu/jrer/papers/pdf/past/vol24n02/02.129_152.pdf
    File Function: Full text
    Download Restriction: no

    Citations

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


    Cited by:

    1. Skanderson, David & Ritter, Dubravka, 2014. "Fair lending analysis of credit cards," Payment Cards Center Discussion Paper 14-2, Federal Reserve Bank of Philadelphia.
    2. Danny Ben-Shahar, 2008. "Default, Credit Scoring, and Loan-to-Value: a Theoretical Analysis under Competitive and Non-Competitive Mortgage Markets," Journal of Real Estate Research, American Real Estate Society, vol. 30(2), pages 161-190.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:24:n:2:2002:p:129-152. 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: (JRER Graduate Assistant/Webmaster). General contact details of provider: http://www.aresnet.org/ .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.