Ethno-Racial Disparities in Adverse Experiences at Mortgage Closing: Evidence From the National Survey of Mortgage Originations

José Loya

Housing Policy Debate, 2024, vol. 34, issue 6, 834-850

Abstract: The mortgage industry is central to ethno-racial stratification in access to homeownership. Obtaining a successful mortgage origination requires many steps, points of verification, and interactions between clients, realtors, and mortgage brokers. Ample research has documented ethno-racial inequality in mortgage loan outcomes and during the early stages of the homebuying process, such as minority steering and quality of service. However, it is unclear whether and to what extent ethno-racial inequality is exhibited during the final stage of the homebuying process. Therefore, this article draws on the National Survey of Mortgage Originations, an annual representative sample of new mortgage loan originations, from 2013 to 2017, to assess ethno-racial disparities in adverse loan experiences during the mortgage closing stage. I show that black mortgage holders are more likely to have an adverse experience (a negative experience, an acute lending practice, or an unexpected financial cost) during the closing, compared to Non-Hispanic whites and Asians. Latino and black mortgage holders face similar disparities when it comes to unexpected financial costs (the most severe adverse experience) during the closing appointment. These ethno-racial disparities during the final stage of the mortgage process are extremely troubling as they increase the administrative and economic costs for minority homebuyers. Implications for ethno-racial wealth inequality are discussed.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10511482.2022.2070653 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:houspd:v:34:y:2024:i:6:p:834-850

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RHPD20

DOI: 10.1080/10511482.2022.2070653

Access Statistics for this article

Housing Policy Debate is currently edited by Tom Sanchez, Susanne Viscarra and Derek Hyra

More articles in Housing Policy Debate from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().