The Impact of Minority Representation at Mortgage Lenders

W Frame, Ruidi Huang (), Erik J. Mayer () and Adi Sunderam
Additional contact information
Ruidi Huang: https://www.smu.edu/cox/Our-People-and-Community/Faculty/Ruidi-Huang
Adi Sunderam: https://www.hbs.edu/faculty/Pages/profile.aspx?facId=333538

No 2207, Working Papers from Federal Reserve Bank of Dallas

Abstract: We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching the (near) universe of mortgage applications to loan officers, we find that minorities are significantly underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take-up a loan. These disparities are significantly reduced when minority borrowers work with minority loan officers. Minority borrowers working with minority loan officers also have lower default rates. Our results suggest that minority underrepresentation among loan officers has adverse effects on minority borrowers’ access to credit.

Keywords: mortgages; race; loan officers; approval; default (search for similar items in EconPapers)
JEL-codes: G21 G51 J15 (search for similar items in EconPapers)
Pages: 73
Date: 2022-06-21
New Economics Papers: this item is included in nep-ban, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: The Impact of Minority Representation at Mortgage Lenders (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:94369

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DOI: 10.24149/wp2207

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