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Discrimination in mortgage lending: Evidence from a correspondence experiment

Andrew Hanson, Zackary Hawley, Hal Martin and Bo Liu ()

Journal of Urban Economics, 2016, vol. 92, issue C, 48-65

Abstract: We design and implement an experimental test for differential response by mortgage loan originators (MLOs) to requests for information about loans. Our e-mail correspondence experiment is designed to analyze differential treatment by client race and credit score. Our results show net discrimination by 1.8% of MLOs through non-response. We also find that MLOs offer more details about loans and are more likely to send follow up correspondence to whites. The effect of being African American on MLO response is equivalent to the effect of having a credit score that is 71 points lower.

Keywords: Discrimination; Field experiment; Mortgage lending; Race (search for similar items in EconPapers)
JEL-codes: C93 J15 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1016/j.jue.2015.12.004

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