Mortgage Lenders and the Geographic Concentration of Foreclosures

Stephen Ross and Yuan Wang

No 28781, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use HMDA rate spread loans to identify lenders involved in riskier lending prior to the foreclosure crisis. We develop a shift-share measure of changes in high rate spread share lender representation in housing submarkets across origination years. While half the cross-sectional correlation between foreclosure and high rate spread lender share is explained by borrower observables, we find robust and stable estimates of the within housing submarket relationship between foreclosure and predicted changes in market share. Estimates are not explained by local housing price variation, rather evidence suggests servicer behavior in response to rising local foreclosure rates as a mechanism.

JEL-codes: D14 G01 G21 R21 R23 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-ban, nep-geo and nep-ure
Note: AP EFG PE
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