Regressive Mortgage Credit Redistribution in the Post-Crisis Era

Francesco D’Acunto and Alberto G Rossi

The Review of Financial Studies, 2022, vol. 35, issue 1, 482-525

Abstract: We document four secular trends about U.S. mortgage origination by traditional and FinTech lenders after the 2008-2009 financial crisis. First, since 2011, the overall number, size, and approval rate of small and medium-sized loans have been decreasing over time, relative to large loans. Second, the largest lenders redistribute their lending the most. Third, this loan-size redistribution of credit increases in the size of the lender. Fourth, the effects are stronger for mortgages further away from the conforming loan limit(s) in both directions. We argue that the supply of credit drives these secular trends, and we assess several potential economic mechanisms.

JEL-codes: D78 D92 G18 G21 G23 H32 K22 (search for similar items in EconPapers)
Date: 2022
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