Download or read book Mortgage Default Rates and Borrower Race written by Richard Anderson and published by . This book was released on 2013 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: We estimate a mortgage default model with national data on conventional mortgages that were current from 1986 to 1992. Our analysis confirms the results of previous analyses of Federal Housing Authority mortgages: Black households have higher marginal default rates, controlling for differences in borrower and property characteristics. Further, we do not find that black borrowers have significantly more home equity. These results do not provide evidence of racial discrimination in mortgage lending and suggest that differences in default costs or transaction costs may explain differences in default rates.
Download or read book Mortgage Characteristics and the Racial Incidence of Default written by Phillip Li and published by . This book was released on 2017 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous research has shown that relative to White borrowers, Black and Hispanic borrowers taking out mortgages at the height of the early-2000s housing boom experienced significantly higher delinquency rates. In this paper we attempt to gain a better understanding of the mechanisms that gave rise to these racial differences in mortgage delinquency. Using a database of nearly 9 million mortgages originated between 2005 and 2009, we find that minority borrowers were significantly more likely to have mortgages with high-risk contract characteristics, such as prepayment penalties, variable interest rates, balloon structures, and negative amortization periods. Results from mortgage default models and a decomposition exercise show that the concentration of minority buyers in such loans explains a significant fraction of the difference in default rates between racial groups. The totality of our results suggest that exotic loan characteristics acted as mortgage default accelerants for many minority homeowners that experienced significant income and equity shocks during the Great Recession.
Download or read book Mortgage Lending Racial Discrimination and Federal Policy written by John Goering and published by Routledge. This book was released on 2018-12-20 with total page 665 pages. Available in PDF, EPUB and Kindle. Book excerpt: First published in 1997, this volume features a wealth of contributions discussing mortgage lending discrimination and the role of the FHA, fair lending enforcement and the Decatur case, along with the future of mortgage discrimination research. This key civil rights debate in the wake of the Fair Housing Act 25 years prior is evaluated and clarified through rigorous review of fair lending research, applied projects and enforcement activities to date. It argues forcefully that the right to take out a mortgage to buy a home should be conditioned only upon one’s credit worthiness and not on one’s race or ethnic group.
Download or read book Race and Default in Credit Markets written by Michael A. Stegman and published by DIANE Publishing. This book was released on 1996-07 with total page 135 pages. Available in PDF, EPUB and Kindle. Book excerpt: A research & commentary on the critical policy issue of whether or not racial discrimination exists in the home mortgage lending industry. A collection of essays on this topic by experts such as John Yinger, Stephen Ross, & George Galster. Also includes commentaries on mortgage performance & housing market discrimination, default rates & their place in the controversy, & the role of FHA data in the lending discrimination discussion. Graphs, charts.
Download or read book What We Know About Mortgage Lending Discrimination in America written by Margery Austin Turner and published by DIANE Publishing. This book was released on 2000-07 with total page 69 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S. Department of Housing and Human Development (HUD) presents the report "What We Know About Mortgage Lending Discrimination in America." The report outlines how discrimination can affect access to mortgage capital for minorities.
Download or read book Neighborhood Effects on Mortgage Default Risk written by Robert F. Cotterman and published by . This book was released on 2002-03 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: Examines the effect of neighborhood characteristics on the default of FHA mortgages. Analysis includes both neighborhood characteristics & characteristics of the individual loan & borrower, so that the effects of the neighborhood can be distinguished from those of the individual loan. Analysis seeks to distinguish the effects of neighborhood, race, ethnicity, & income from the effects of the individual borrower's status. Finds that lower tract income & higher tract black composition are assoc. with higher rates of default, whereas individual borrower race or income are unrelated to default. Examines possible causes for these findings. Charts & tables.
Download or read book Mortgage Default and Mortgage Valuation written by John Krainer and published by DIANE Publishing. This book was released on 2010-10 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors develop an equilibrium valuation model that incorporates optimal default to show how mortgage yields and lender recovery rates on defaulted mortgages depend on initial loan-to-value (LTV) ratios. The analysis treats both the frictionless case and the case in which borrowers and lenders incur deadweight costs upon default. The model is calibrated using data on California mortgages. Given reasonable parameter values, the model does a surprisingly good job fitting the risk premium in the data for high LTV mortgages. Thus, from an ex ante perspective, the authors do not find strong evidence of systematic underpricing of default risk in the run-up to the housing market crisis. Charts and tables.
Download or read book Rise in Mortgage Defaults written by and published by DIANE Publishing. This book was released on with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Unintended Consequences of Risk Based Pricing written by Kenneth N. Daniels and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The following analysis focuses on the role that risk pricing has had in the allocation and access to mortgage funds, specifically how it results in cost differences by race. Using a sample of fixed-rate first lien mortgages, we control for the risk characteristics of borrowers and assets. We find that borrowers with comparable credit quality experience significantly higher costs for mortgages in neighborhoods with a high density of minority households. Further, when the pricing differential is controlled for in a model of mortgage default, there is no support for neighborhood price differences. This finding illustrates a potential inequity that results from efficient/risk pricing in mortgage underwriting.
Download or read book Mortgage Lending Discrimination and Racial Differences in Loan Default written by Stephen L. Ross and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper performs a theoretical analysis of the use of racial differences in loan default to test for mortgage lending discrimination. The default approach has received considerable attention in the press and in academic arenas, and yet the theory underlying this approach has not been carefully explored. The loan process is thought to create a selected sample of loans. If mortgage lenders discriminate by holding minorities to a higher standard, the sample selection bias in the minority sample of loans will be more extreme than the bias in the majority sample, and the sample of minority loans should exhibit lower default rates than the majority sample. This paper examines the default approach explicitly in this sample selection framework and observes that the approach suffers from heteroscedasticity bias because loan defaults are a discrete dependent variable. In addition, the paper examines the impact of correlations between race and the unobservables in the loan approval and default equations. Both of these correlations are shown to bias the default approach away from finding discrimination under the standard assumptions.
Download or read book The Determinants of Mortgage Delinquency written by Adam Reichenberger and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent housing crisis has highlighted the need to better understand the determinants of mortgage default. Concerns about potential sizable differences in default rates by race and ethnicity as well as reports in the popular press regarding the propensity for rising numbers of homeowners to strategically default motivate a careful study of mortgage delinquency in America post-housing bubble. Using longitudinal data from the Panel Study of Income Dynamics (PSID), we examine borrowers in the years 2005, 2007 and 2009 and, controlling for a number of default-related variables, take a closer look at the characteristics of those delinquent on their mortgage by 2009. We find startling racial and ethnic gaps present as well as strong effects from children, education, and the presence of recourse/non-recourse laws in the state of residence on the likelihood of delinquency. In addition, we find evidence that strategic default plays a role in explaining the likelihood that a homeowner in 2005 will be delinquent on his or her mortgage by 2009.
Download or read book Mortgage Lending Racial Discrimination and Federal Policy written by John Goering and published by Routledge. This book was released on 2018-12-20 with total page 743 pages. Available in PDF, EPUB and Kindle. Book excerpt: First published in 1997, this volume features a wealth of contributions discussing mortgage lending discrimination and the role of the FHA, fair lending enforcement and the Decatur case, along with the future of mortgage discrimination research. This key civil rights debate in the wake of the Fair Housing Act 25 years prior is evaluated and clarified through rigorous review of fair lending research, applied projects and enforcement activities to date. It argues forcefully that the right to take out a mortgage to buy a home should be conditioned only upon one’s credit worthiness and not on one’s race or ethnic group.
Download or read book Race Ethnicity and High Cost Mortgage Lending written by Patrick J. Bayer and published by . This book was released on 2014 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how high cost mortgage lending varies by race and ethnicity. It uses a unique panel data that matches a representative sample of mortgages in seven large metropolitan markets between 2004 and 2008 to public records of housing transactions and proprietary credit reporting data. The results reveal a significantly higher incidence of high costs loans for African-American and Hispanic borrowers even after controlling for key mortgage risk factors: they have a 7.7 and 6.2 percentage point higher likelihood of a high cost loan, respectively, in the home purchase market relative to an overall incidence of 14.8 percent among all home purchase mortgages. Significant racial and ethnic differences are widespread throughout the market - they are present (i) in each metro area, (ii) across high and low risk borrowers, and (iii) regardless of the age of the borrower. These differences are reduced by 60 percent with the inclusion of lender fixed effects, implying that a significant portion of the estimated market-wide racial differences can be attributed to differential access to (or sorting across) mortgage lenders.
Download or read book Discrimination and Racial Differences in Home Mortgage Interest Rates written by Gordon Crawford and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates the possible yield premia paid by Asians, Hispanics, and African Americans borrowers to a national home mortgage lender in the years 1988-1989. The calculated premia are defined to hold daily market rates, rate lock protection, and borrower risk factors constant. Conventional loan interest rates are almost perfectly race- neutral. However, government (FHA and VA) credit models show significant, but very small premia paid by Hispanics and African Americans. The estimated premium for Hispanic borrowers is not robust to some reasonable alternative specifications. The differential for African American borrowers is more robust, but may be explained by the inability of African Americans to find alternatives to their rate commitments when rates fall.
Download or read book Identification of Discrimination in Mortgage Lending Markets written by Michael LaCour-Little and published by . This book was released on 1996 with total page 500 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Role of Neighborhood Characteristics in Mortgage Default Risk written by Sewin Chan and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a rich database of non-prime mortgages from New York City, we find that census tract level neighborhood characteristics are important predictors of default behavior, even after controlling for an extensive set of controls for loan and borrower characteristics. First, default rates increase with the rate of foreclosure notices and the number of lender-owned properties (REOs) in the tract. Second, default rates on home purchase mortgages are higher in census tracts with larger shares of black residents, regardless of the borrower's own race. We explore possible explanations for this second finding and conclude that it likely reflects differential treatment of black neighborhoods by the mortgage industry in ways that are unobserved in our data.
Download or read book Cityscape written by and published by . This book was released on 1996 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt:
