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First-Time Homebuyer Counseling and the Mortgage Selection Experience in the United States: Evidence from the National Survey of Mortgage Originations


  • Robert Argento

    (Freddie Mac)

  • Lariece Brown

    (Freddie Mac)

  • Sergei Koulayev

    (Consumer Financial Protection Bureau)

  • Grace Li

    (Fannie Mae)

  • Marina Myhre

    (U.S. Department of Housing and Urban Development)

  • Forrest W. Pafenberg

    (Federal Housing Finance Agency)

  • Saty Patrabansh

    (Federal Housing Finance Agency)


The existing literature on homebuyer education and counseling (HEC) consists almost exclusively of evaluations of specific programs, generally using mortgage loan performance as the metric of success. This paper contributes to the literature in two ways. First, it provides evidence on the benefits of HEC to mortgage borrowers in aspects other than mortgage performance. Second, the paper evaluates HEC in general, not just one specific program. It does so by drawing from a nationally representative sample of all first-time homebuyers in the United States who took out a mortgage in 2013 and 2014. The study data comes from the National Survey of Mortgage Originations (NSMO), a new survey co-sponsored by the Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB). We find that 14 percent of a nationally representative sample of first-time homebuyers reported receiving some form of HEC. Using two different matching estimation techniques (propensity score and coarsened exact matching) and ordinary least squares, we find that first-time homebuyers who reported receiving HEC also reported better mortgage knowledge, higher incidence of comparing final costs to the Good Faith Estimate (GFE), higher incidence of selecting a mortgage based on cost, and higher level of satisfaction with mortgage terms and the mortgage process.

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  • Robert Argento & Lariece Brown & Sergei Koulayev & Grace Li & Marina Myhre & Forrest W. Pafenberg & Saty Patrabansh, 2018. "First-Time Homebuyer Counseling and the Mortgage Selection Experience in the United States: Evidence from the National Survey of Mortgage Originations," NMDB Staff Working Papers 18-02, Federal Housing Finance Agency.
  • Handle: RePEc:hfa:nmdbwp:18-02

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    References listed on IDEAS

    1. Agarwal, Sumit & Amromin, Gene & Ben-David, Itzhak & Chomsisengphet, Souphala & Evanoff, Douglas D., 2014. "Predatory lending and the subprime crisis," Journal of Financial Economics, Elsevier, vol. 113(1), pages 29-52.
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    5. Roberto Quercia & Jonathan Spader, 2008. "Does homeownership counseling affect the prepayment and default behavior of affordable mortgage borrowers?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(2), pages 304-325.
    6. Sumit Agarwal & Gene Amromin & Itzhak Ben-David & Souphala Chomsisengphet & Douglas Evanoff, 2014. "The Effectiveness of Mandatory Mortgage Counseling: Can One Dissuade Borrowers from Choosing Risky Mortgages?," NBER Working Papers 19920, National Bureau of Economic Research, Inc.
    7. Stephanie Moulton & J. Michael Collins & Cäzilia Loibl & Anya Samek, 2015. "Effects of Monitoring on Mortgage Delinquency: Evidence From a Randomized Field Study," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(1), pages 184-207, January.
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