Differences in the Cost of Mortgage Credit Implications for Discrimination

Differences in the Cost of Mortgage Credit Implications for Discrimination This paper estimates the mortgage interest rate differences paid by Asian, Hispanic, and African–American borrowers to a national home mortgage lender in the years 1988–1989. Controlling for differences in market rates, rate lock protection, and borrower risk factors, conventional loan interest rates are almost perfectly race-neutral. The single deviation from race-neutrality is that when interest rates fall during the borrower's rate-lock period, only African–American borrowers are unable to capture a share of this decline. Government (FHA and VA) credit models show small premia paid by African–American borrowers of about $1.80 per month on average. In government lending, Hispanic borrowers alone are unable to capture rate declines occurring during the borrower's rate-lock period. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Differences in the Cost of Mortgage Credit Implications for Discrimination

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Kluwer Academic Publishers
Copyright © 1999 by Kluwer Academic Publishers
Economics; Regional/Spatial Science; Financial Services
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