Home Mortgage Research Articles

Walking the Walk? Bank ESG Disclosures and Home Mortgage Lending

We show that banks with high environmental, social, and governance (ESG) ratings issue fewer mortgages in poor localities—in number and dollar amount—than banks with low ESG ratings. This lending disparity is observed at both the county and census tract level and worsens in disaster areas of severe hurricane strikes. Additional tests indicate no difference in mortgage default rates between high- and low-ESG banks, rejecting an alternative explanation based on differential credit screening quality. The evidence hints at social wash: banks deploy prosocial rhetoric and symbolic actions while not lending much in disadvantaged communities, the social function they arguably ought to perform. Community Reinvestment Act (CRA) examinations partially undo the social wash effect.

International Real Estate Review

This paper investigates two types of housing wealth effects: conventional housing wealth and collateral. We incorporate home equity extraction (HEE) and the influence of mortgage liberalization into the model in Campbell and Mankiw (1989). Based on U.S. data during the 1977Q1–2019Q4, our empirical results suggest that consumption is remarkably influenced by the use of HEE, rather than home equity. Furthermore, the rapid expansion of mortgage securitization significantly amplifies the collateral effect. Conditional on the use of HEE and the share of non-bank mortgage holdings, housing wealth has an average marginal propensity to consume (MPC) of 0.84 cents and a maximum MPC of 6.06 cents. In 2007, when market-based mortgage pools and issuers of asset-backed securities held more than 60% of home mortgages, the HEE shock explained for over 50% of the forecasting variance of consumption growth. The results provide evidence that with a focus on collateral value, lenders allow more equity withdrawal, which leads to higher consumption.

Equality and Access to Credit: A Social Contract Framework

The problems governments face in regulating consumer finance fall into two categories: normative and cognitive. The normative problems have to do with the way that some governments, particularly those adhering to an American model of household finance, have financed social mobility and intergenerational welfare through debt, a tenuous and socially risky policy choice. Credit has a substantial social aspect to it in the United States, where the federal government has in some way engaged in subsidizing about 1/3 of consumer credit, particularly in the residential mortgage market, feeding into a substantial capital markets dimension through government-guaranteed securitization. Most Americans think they “choose” and “earn” their wealth only through their own efforts, but in fact a substantial institutional apparatus of government assistance supports wealth creation, particularly for higher income households, including substantial disguised subsidies supporting home mortgage credit. Access to credit in such a system becomes a social primary good in need of regulation to ensure compliance with equality principles appropriate to the society in question. Governments have poor records in regulating access to credit and in some cases enact law or support social structures going in the opposite direction, towards injustice, substantially impairing the life chances of persons and families in historically disadvantaged groups, compounding status and material inequality. No government has as yet developed appropriate policy tools to evaluate the effects of financial regulation on equality. Rather, most policies have historically entrenched and even promoted inequality. The cognitive problems have to do with the dilemma of trading off between paternalism and autonomy in consumer financial regulation. Disclosure approaches fail because they do not adequately take the cognitive limitations of persons into account. Debtors do not read or understand terms and conditions. Paternalism can fail because capital can freely exit a market and engage in regulatory arbitrage in seeking out the best returns. If credit is what in a Rawlsian framework can be understood as a social primary good in a society then all of these problems are all the more serious. The solutions to these twin normative-cognitive problems are in either taking the distributive justice of access to credit seriously or in decoupling debt from its role in producing social mobility when this cannot be done. Debt can be ill-suited for allocating basic means to a good life in a society. It converts collective duties of justice owed to individuals to private duties of contract owed by individuals, aggravating power and domination dynamics in a society and worsening inequality.

Non- Bank Islamic Mortgage in Maqashid al-Sharia Perspective

Home mortgage or KPR is regarded as an alternative answer for possessing a house recently, Home mortgage should be possible either through Conventional bank and sharia bank. However, recently there have been new alternatives of owning home by using non-bank Islamic mortgage. Where the mortgage can presently be directly handled by the developer without involving the bank. The issues of this Paper are describing the opinion that non-Bank Islamic Mortgage is more sharia than Islamic Banking in providing Islamic Housing, such as no BI Checking, no riba, no fines, no confiscation, and etc. The purpose of this research is to identify the scheme of non-bank Islamic Mortgage, and analyse the scheme in Maqasid Sharia perspective as Importance foundation in religion. The methods in this study are descriptive analysis research. The data used is secondary data and data collection techniques are literature studies. After discussing, the results showed that Non-Bank Islamic Mortgage cause a lot of harm in term of customer and sharia developer it self in Maqāsid Sharia perspective.

The Price of Mortgage Financing for Native Americans

We demonstrate that mortgage loans made to Native American primary borrowers are systematically more likely to be higher-priced than other mortgage loans. This difference is pronounced for mortgage loans on reservations: 27% of mortgage loans for properties on reservation lands with Native Americans as the primary borrower are higher-priced, while only 8.7% of mortgage loans nearby reservations made to non-Native American borrowers are higher-priced. Conditional on having a higher-priced loan, the rate spread facing Native Americans is also higher than non-Native Americans. These findings come from the 2010 to 2017 Home Mortgage Disclosure Act Data which is the most comprehensive, consistent series of mortgage loan data in the USA. We discuss the factors that may drive these outcomes.

The Impact of Balance Sheet Lending versus Securitization Booms on the Severity of the Great Recession

I separately estimate the effect of local credit booms driven by balance sheet lending and those driven by securitization during the 2002-2006 period on the severity of the 2007-2009 recession in the United States. I construct a novel dataset, linking publicly available data on residential mortgage originations from the Home Mortgage Disclosure Act together with bank financial statements and county level economic outcomes. I exploit geographic variation in bank origination activity across counties to construct county level measures of exposure to securitization and balance sheet lending activity during the 2002-2006 period that are orthogonal to local economic conditions. Results show that 2002-2006 securitization exposure is predictive of sharper declines in home prices, employment, and a rise in mortgage delinquencies during the subsequent crisis period. The same is not true for balance sheet lending, which does not affect crisis period home prices and generates a drop in employment that is con fined to the nontradable sector. Results suggest that this difference is driven by risk taking that is specific to securitized lending. Balance sheet booms generate an expansion in lending to higher quality borrowers, while securitization booms increase credit availability at the lower end of the credit distribution.

The Racial Landscape of Fintech Mortgage Lending

ABSTRACT Little is known about racial patterns in fintech mortgage lending, despite evidence of racial disparities in the broader mortgage market. This study leverages 2015–2017 Home Mortgage Disclosure Act data to assess disparities in lending outcomes between White and non-White applicants and between neighborhoods of varying racial composition in the United States’ 200 largest metropolitan areas at fintech and traditional lenders. Results of a series of binary logistic regression models suggest disparities in rates of loan approvals between White and similarly qualified non-White applicants are substantively small overall, but lower at fintech lenders relative to traditional lenders, most substantially for Latinos. Non-White applicants are more likely to receive subprime terms relative to similarly qualified White applicants at both lender types, and disparities in rates of subprime loan receipt between Black and similarly qualified White applicants are greater at fintech lenders than traditional lenders. Neighborhood racial composition has a mixed but substantively small impact on approval rates at both lender types. However, both lender types distribute subprime credit to non-White neighborhoods at significantly higher rates than to White neighborhoods. Findings suggest fintech lending contributes to racial and spatial disparities in subprime mortgage lending and warrants increased scrutiny from regulators.

The Great Recession and Ethno-Racial Disparities in Access to Mortgage Credit

Abstract The mortgage industry has long been central to racially and ethnically stratified access to homeownership. Liberalized access to credit during the 1990s and early 2000s targeted subprime and other high-cost loans to individuals and communities of color. This article draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2004 through 2017 to assess short-term variation in racial and ethnic disparities in loan outcomes associated with the Great Recession. We show that, relative to the boom, this period is associated with a reduction in disparities in loan outcomes between non-Hispanic whites and Asians on the one hand and blacks and Latinos on the other. This is particularly true for the disproportionate channeling of black and Latino applicants into high-cost loans, and in communities with higher minority concentrations. As the economy and access to credit improved, particularly after 2011, black and Latino over-representation in high-cost loans began to rebound, though ethno-racial disparities in loan rejection continued well below levels observed during the boom years. The return of inequality in high-cost lending is particularly troubling in light of the sharp drop in minority applications. Implications for ethno-racial stratification are discussed.

The Pandemic’s Effect on the Housing Market and Mortgage Delinquency

Weekly data show how housing activity contracted as the pandemic expanded. Both the home purchase and home rental markets experienced a 40% to 50% decline by mid-April relative to year-ago activity, but subsequently rebounded. Record low mortgage rates spurred home buying, driven by first-time home buyers, and a refinance boom. Home prices rose through summer 2020 as the for-sale inventory remained in short supply, but price growth is forecast to slow and fall in several states by 2021. Projections show that elevated unemployment coupled with declining home prices would cause serious delinquency and distressed sales to rise. Compared with the pre-pandemic period, the Baseline projection shows a four-fold increase in serious delinquency and distressed sales within two years, with more than 2 million home mortgages in serious delinquency by year-end 2021. TOPICS:Real estate, MBS and residential mortgage loans, financial crises and financial market history Key Findings • Both the home purchase and home rental markets experienced a 40% to 50% decline by mid-April relative to year-ago activity, but subsequently rebounded. • Projections show that elevated unemployment coupled with declining home prices would cause serious delinquency and distressed sales to rise. • Compared with the pre-pandemic period, the Baseline projection shows a four-fold increase in serious delinquency and mortgage loss events within two years, with more than 2 million home mortgages in serious delinquency by year-end 2021.

A Consumer Behavior and Lifestyle with the Interest of Buying As Mediation in Determining Home Purchase with Subsidy Credit in Jember

The need for houses is almost never decreasing, this opportunity is exploited by developers to realize government programs related to meeting the needs of subsidized housing mortgages. Developers must be able to know how consumer tastes are changing every day in line with current trends, and it is a challenge for developers to be able to predict future demand. This understanding needs further investigation to find out how consumers consider everything before finally making a decision to buy. The purpose of this study was to analyze and determine the effect of consumer behavior and lifestyle on the interests and decisions of the purchase of subsidized KPR housing in Jember Regency. The sample in this study consumers from 10 developers in Jember were 150 respondents. The results of the analysis show that consumer behavior influences consumer buying interest in the purchase of subsidized housing mortgages, lifestyle influences consumer buying interest in home mortgages, consumer behavior influences consumer purchasing decisions in buying subsidized housing mortgages in Jember, lifestyle has a significant effect on purchasing decisions in buying subsidized housing mortgages in Jember, buying interest influences purchasing decisions in determining the purchase of subsidized housing mortgages in Jember, and based on the results of testing the direct and indirect influence of consumer behavior and lifestyle on purchasing decisions through interest, the results show that the direct influence of consumer behavior and the lifestyle of buying interest and purchasing decisions has a greater influence than indirect influence.
 
 Keywords: consumer behavior, lifestyle, buying interest and purchasing decisions.

Does increased access to home mortgage money reduce local crime rates? Evidence from San Diego County

This study provides estimates of the impact of increased access to home mortgage credit on local crime rates and uses national home mortgage loan origination volume as an instrument for local home mortgage loan origination volume. The focus of the study is San Diego County from 2007-Q1 to 2013-Q1. The regression estimates indicate that increased access to home mortgage loans during this time period had a statistically significant negative impact on local crime rates: the baseline specification suggests that a ten percentage point increase in the growth in home mortgage loan originations decreases the growth in total crime incidents by approximately 2.75 percentage points. This finding is robust to different model specifications.

Collateral Damage: The Impact of Foreclosures on New Home Mortgage Lending in the 1930s

The Great Depression of the 1930s involved a severe disruption in the supply of home mortgage credit. This paper empirically identifies a mechanism lying behind this credit crunch: the impairment of lenders’ balance sheets by illiquid foreclosed real estate. With data on hundreds of building and loans (B&Ls), the leading mortgage lenders in this period, we find that the overhang of foreclosed real estate explains about 30 percent of the drop in new lending between 1930 and 1935.

Credit, default, financial system and development

We address instrumentalized co-movements across time and frequencies between macro-finance variables and household decisions in terms of consumer loans, home mortgage and its respective delinquency rates in U.S. Methodologically, we use partial wavelet coherency, partial phase-difference diagram and partial regression coefficient. We provide insights to stock market return prediction and asset pricing puzzles. Our findings are useful to draw public policies to safeguard financial stability and to analyze financial crisis drivers. The simultaneous variation of statistics along time and frequencies allow us to detect new stylized facts about the last three decades of U.S. financial development and economic growth.

Abstract C072: Structural racism and race- and subtype-specific breast cancer incidence in California, 2006-2015

Abstract Background: Breast cancer is the most commonly diagnosed noncutaneous cancer and the second leading cause of death from cancer among women in the United States. Breast cancer is a heterogeneous disease and subtypes defined by hormone-receptor (HR) and HER2Neu status have distinct etiologic and prognostic profiles. African American women are more likely than White women to be diagnosed with HR-/HER2-, or triple-negative, breast cancer (TNBC), which is more aggressive and has a higher fatality rate than HR+ subtypes, including Luminal A. Determinants of racial disparities in breast cancer subtype are poorly understood. African Americans have historically been, and continue to be, subjected to institutionalized discrimination. Such discrimination, including housing discrimination, may contribute to breast cancer disparities, particularly, higher rates of TNBC among African American women. The aim of this study was to characterize the association between racial bias in mortgage lending and race- and subtype-specific breast cancer incidence rates in California. Methods: We merged data from the California Cancer Registry on all women aged 20+ diagnosed with primary breast cancer between 2006-2015 with census tract characteristics where cases reside at time of diagnosis, including a new racial bias index, generated using data from the Home Mortgage Disclosure Act, 2007-2013. Racial bias was operationalized as the odds of a mortgage application denial for a Black applicant as compared to a White applicant, adjusting for individual sex, and the ratio of the loan amount to the applicant's gross annual income. We classified census tracts with an average Black-White mortgage denial OR>2.5 as “high anti-Black bias.” Using Poisson regression with generalized estimating equations, we estimated the association between anti-Black bias and race-, age-, and subtype-specific breast cancer case counts, with population size as offset, and adjusting for census tract average age, socioeconomic status, racial composition, and residential stability. Results: We identified n=104,716 cases of Luminal A breast cancer and n=14,238 cases of TNBC over the study period. Among White—but not African American—women, living in a census tract with high anti-Black bias was positively associated with incidence of Luminal A breast cancer (IRR=1.05, 95% CI=1.03, 1.07). This association was only slightly attenuated after adjusting for tract-level demographics (IRR=1.02, 95% CI=1.01, 1.04). No association was found between anti-Black bias and TNBC among either racial group (White IRR=1.00, 95% CI=0.96, 1.03; Black IRR=1.00, 95% CI=0.93, 1.01). Conclusion: Among White women, living in communities with high levels of anti-Black housing discrimination may be associated with increased risk of Luminal A breast cancer. Future research into the psychosocial and/or material mechanisms underpinning this association is warranted. Citation Format: Elizabeth Michaels, Kirsten Beyer, Alison Canchola, Yuhong Zhou, Scarlett Gomez. Structural racism and race- and subtype-specific breast cancer incidence in California, 2006-2015 [abstract]. In: Proceedings of the Eleventh AACR Conference on the Science of Cancer Health Disparities in Racial/Ethnic Minorities and the Medically Underserved; 2018 Nov 2-5; New Orleans, LA. Philadelphia (PA): AACR; Cancer Epidemiol Biomarkers Prev 2020;29(6 Suppl):Abstract nr C072.

Abstract C061: Neighborhood racial context and race- and subtype-specific breast cancer incidence among non-Hispanic Black and non-Hispanic White women in California, 2006-2015

Abstract BACKGROUND: Determinants of racial inequities in risk of subtype-specific breast cancers are poorly understood. Features of the neighborhood context may contribute to racial inequities along the breast cancer continuum, however few have examined subtype-specific incidence. Therefore, this study aimed to characterize the association between the neighborhood racial context (housing discrimination and racial composition) and race- and subtype-specific breast cancer incidence among NH Black and NH White women in California. METHODS: We merged data from the California Cancer Registry on women aged 20+ diagnosed with primary breast cancer between 2006-2015 with neighborhood racial context at time of diagnosis: census tract % NH Black and a new racial bias index derived using 2007-2013 data from the Home Mortgage Disclosure Act. We used Poisson regression to estimate associations between neighborhood racial context and race- and Luminal A and TNBC (triple-negative breast cancer)-specific incidence rates, adjusting for neighborhood confounders. RESULTS: We identified n=104,716 cases of Luminal A and n=15,739 cases of TNBC over the study period. Among Black women, living in a high % Black census tract was associated with higher incidence of Luminal A (IRRadj=1.16 (1.08, 1.24)) and TNBC (IRRadj=1.17 (1.04, 1.32)) subtypes, relative to residence in low % Black tracts. No statistically significant association between neighborhood racial composition and either subtype was observed among NH Whites, nor between racial bias in mortgage lending and breast cancer among either racial group. CONCLUSION: Neighborhood racial composition may proxy cross-cutting social and environmental risk factors for breast cancer, regardless of subtype. These exposures may disproportionately burden Black versus White women with respect to breast cancer risk. Citation Format: Eli K. Michaels, Kirsten M.M. Beyer, Yuhong Zhou, Alison J. Canchola, Salma Shariff-Marco, Scarlett L. Gomez. Neighborhood racial context and race- and subtype-specific breast cancer incidence among non-Hispanic Black and non-Hispanic White women in California, 2006-2015 [abstract]. In: Proceedings of the Twelfth AACR Conference on the Science of Cancer Health Disparities in Racial/Ethnic Minorities and the Medically Underserved; 2019 Sep 20-23; San Francisco, CA. Philadelphia (PA): AACR; Cancer Epidemiol Biomarkers Prev 2020;29(6 Suppl_2):Abstract nr C061.

PENGARUH HARGA, FASILITAS, PENGELUARAN KONSUMEN, DAN ANGGOTA JUMLAH KELUARGA TERHADAP PERMINTAAN RUMAH KPR BERSUBSIDI KECAMATAN ALALAK KABUPATEN BATOLA

The research was conducted to find out: 1. How the price, facilities, consumer spending, and number of households had on subsidized home demand. 2. Which factor is most dominant affecting the demand of subsidized home MORTGAGES. This method of research uses quantitative and qualitative approaches. Variables or factors affecting the demand for a home that can be translated in numbers, will be analyzed with a quantitative approach, but information from consumers that cannot be translated in numbers will be depicted In the form of a qualitative narrative.The results showed that the facility factor, consumer spending was influential on the demand for subsidized homes in the district Alalak Barito Kuala District, stated that the most influential factor is the consumer spending factor With a result of the calculated T 2,453 and the second is the facility factor with a result of the count of 2,082. Simultaneously the whole of variables X1, X2, X3, X4. Effect on the Y of the test results F, F count of 4,302. means the price, facilities, consumer spending, the number of simultaneous families have a positive effect on the demand of subsidized homes in the sub-district of Batola district.Keywords: price factors, facilities, consumer spending, number of families, to home demand

Coastal amenities and income stratification

Income measures from mortgage applications, available due to the Home Mortgage Disclosure Act of 1975 and from IRS records, indicate that several summary statistics describing real incomes for shoreline zip codes along the Gulf Coast of Florida are larger than the same statistics for adjacent interior zip codes. The differences are statistically significant and growing over the longest period studied, 1990 to 2017. We argue that they provide direct support for coastal amenities as a motivation for income stratification.

Similar Origins – Divergent Paths: The Politics of German and Dutch Housing Markets

This article is a comparative study of Dutch and German housing markets. Until the early 1990s, the two housing markets shared many commonalities, both in terms of their specific characteristics and the larger political, economic, and institutional contexts in which they were embedded. Since the 1990s, in contrast, the two housing markets have diverged significantly; with home ownership, mortgage debt and housing prices much higher in the Netherlands than Germany. We explain this divergence, first, by pointing out the more extensive turn to neoliberalism in housing policy in the Netherlands than in Germany. Second, we look at the differences in the treatment of private renting versus not-for-profit social housing by governments in each country. Third, we draw attention to mortgage liberalisation after 1993 in the Netherlands, which did not happen in Germany, and the treatment of fiscal subsidies for home ownership. This paper contributes to the debate on varieties of residential capitalism and stresses that housing patterns diverge even among countries with the same welfare state typologies and similar rental markets.

Mortgage discrimination and breast cancer survival among older women in the United States.

e13615 Background: Although racism and racial residential segregation are widely considered to contribute to health disparities, including in breast cancer, studies examining the impact of mortgage discrimination, a factor contributing to residential racial segregation, and breast cancer survival are limited. The objective of this study is to examine the relationship between redlining (mortgage discrimination based on property location) and survival among older women with breast cancer. Methods: Using the Home Mortgage Disclosure Act (HMDA) database, we estimated redlining for all census tracts in the Metropolitan Statistical Areas (MSAs) within 15 Surveillance Epidemiology and End Results (SEER) areas. This measure was linked by tract with a SEER-Medicare cohort of 27,516 women aged 66-90 years with an incident stage I-IV breast cancer in 2007-2009 and claims information through 2014. We used cox proportional hazards regression models with survival time as the outcome variable and a 4-level categorical logged redlining variable as the key predictor. We also modeled the hazard ratio using redlining as a continuous variable. Models were stratified by stage, ER/PR status, and age group and adjusted for comorbidity and MSA-level standard error. Results: At a median follow-up of 72 months, one-third of the cohort was deceased. The majority of the cohort had no comorbidities and had hormone receptor-positive, early stage (I/II) cancers. Redlining was associated with poorer survival. When redlining is discretized into four groups with approximate equal-sized intervals, the first and second highest redlining groups are significantly associated with all-cause mortality (HR = 1.226 [1.108, 1.355] for the highest group; HR = 1.159 [1.095, 1.228] for the second highest group). When redlining and its quadratic terms are included in the model, the original and square terms are significantly associated with all-cause mortality (HR = 1.177 [1.111, 1.248] for redlining; HR = 0.982 [0.973, 0.991] for squared redlining). Conclusions: The study suggests that redlining could negatively contribute to breast cancer survival. Persistent place-based mortgage discrimination, as a manifestation of institutional racism, could have long-term effects on people’s health, possibly by impacting health care access or exposing residents to harmful neighborhood conditions. Housing policies that seek to reduce or eliminate place-based mortgage discrimination could contribute to reducing breast cancer survival disparities.

Race in relation to bank depositors and mortgage applications

AbstractData associated with the Home Mortgage Disclosure Act (HMDA) are often studied for evidence of discrimination in terms of minority applicants or for home location in minority neighborhoods, with mixed results. The present analysis utilizes a data set covering 2014–2016, combining characteristics of home location and applicants from the HMDA data with information on depositor characteristics from the Federal Insurance Deposit Corporation's Summary of Deposits data and the Census Bureau's American Community Survey. Consistent with predictions from the red‐lining literature, loan acceptance rates are adversely influenced by high minority locations, although the effect is larger for minority applicants. The relationship banking literature predicts that community banks will yield higher rates of loan acceptance, and the results support that hypothesis. That same literature suggests that familiarity in terms of similar race/ethnicity characteristics for depositors and home location or loan applicants will yield a loan acceptance advantage; and that hypothesis is not supported. Subsidiary analyses suggest that market competition improves loan acceptance rates for minority applicants, consistent with models of discrimination. Additionally, minority depositors are associated positively with loan acceptance rates, which may reflect higher levels of bank risk, and a risk premium, in those markets.