EconPapers    
Economics at your fingertips  
 

Do Minorities Pay More for Mortgages?

Neil Bhutta and Aurel Hizmo

No 2020-007, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We test for racial discrimination in the prices charged by mortgage lenders. We construct a unique dataset where we observe all three dimensions of a mortgage's price: the interest rate, discount points, and fees. While we find statistically significant gaps by race and ethnicity in interest rates, these gaps are offset by differences in discount points. We trace out point-rate schedules and show that minorities and whites face identical schedules, but sort to different locations on the schedule. Such sorting may reflect systematic differences in liquidity or preferences. Finally, we find no differences in total fees by race or ethnicity.

Keywords: Discrimination; Fair lending; Mortgage; Points; Interest rate; FHA; Consumer protection; High-cost mortgage (search for similar items in EconPapers)
JEL-codes: G21 G28 R51 (search for similar items in EconPapers)
Pages: 45 p.
Date: 2020-01-31
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://www.federalreserve.gov/econres/feds/files/2020007pap.pdf (application/pdf)

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:fip:fedgfe:2020-07

DOI: 10.17016/FEDS.2020.007

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-10-24
Handle: RePEc:fip:fedgfe:2020-07