The Impact of Minority Representation at Mortgage Lenders
Publication Date
10-19-2021
Abstract
We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching the (near) universe of mortgage applications to loan officers, we find that minorities are significantly underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take-up a loan. These disparities are significantly reduced when minority borrowers work with minority loan officers. Minority borrowers working with minority loan officers also have lower default rates. Our results suggest that minority underrepresentation among loan officers has adverse effects on minority borrowers’ access to credit.
Document Type
Article
Keywords
Race, Mortgage, Credit Access, Loan Officer, Household Finance, Financial Institution
Disciplines
Finance
DOI
10.2139/ssrn.4054761
Source
SMU Cox: Finance (Topic)
Language
English
