Abstract
Racial disparities persist in the mortgage lending market, as does debate over their causes. This articleexamines whether the racial composition of a lender's workforce affects the loan approval rate forminority applicants. The relationship between employment of, and mortgage lending to, blacks, Hispanics,and Asians, is examined in five metropolitan areas: Atlanta, Boston, Denver, Milwaukee, andSan Francisco.Linear multiple regression for institutional-level analysis and probit analysis for applicant-level analysisindicate that the racial composition of the workforce does affect loan approval rates for minorityapplicants. For blacks and Hispanics, employment, particularly in administrative and professionalpositions, positively affects loan approval; the findings for Asians were mixed. Further research issuggested for developing a fuller understanding of the relationship between employment and loanapplication approval. Specific policy recommendations are proposed for regulatory agencies, lenders,and community organizations.
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