Abstract

http://ssrn.com/abstract=1489032
 
 

References (30)



 
 

Citations (6)



 


 



The Pricing of Mortgages by Brokers: An Agency Problem?


Michael LaCour-Little


California State University at Fullerton

October 14, 2009

Journal of Real Estate Research, Vol. 31, No. 2, 2009

Abstract:     
Mortgage brokers have grown in importance in the home mortgage origination process in recent years, suggesting they provide a valuable service matching borrowers and lenders, although their involvement has also been linked to the recent surge in mortgage defaults and foreclosures. As in other markets dominated by brokers, agents’ incentives are often poorly aligned with those with whom they do business, in this case both the lenders who bear the risks once the loan is originated and the consumer who assumes liability for the debt and contract terms. This paper describes the institutional arrangements under which mortgage brokers operate and empirically test whether loans originated by mortgage brokers are lower in cost than those that would be available directly from retail lenders. The results suggest that loans originated by brokers cost borrowers about 20 basis points more, on average, than retail loans and that this premium is higher for lower income and lower credit score borrowers.

Number of Pages in PDF File: 30

Keywords: Broker, Mortgage, origination

Accepted Paper Series


Download This Paper

Date posted: October 15, 2009  

Suggested Citation

LaCour-Little, Michael, The Pricing of Mortgages by Brokers: An Agency Problem? (October 14, 2009). Journal of Real Estate Research, Vol. 31, No. 2, 2009. Available at SSRN: http://ssrn.com/abstract=1489032

Contact Information

Michael LaCour-Little (Contact Author)
California State University at Fullerton ( email )
5133 Mihaylo Hall
Fullerton, CA 92834-6848
United States
657-278-4014 (Phone)
657-278-2161 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 488
Downloads: 84
Download Rank: 175,374
References:  30
Citations:  6

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.281 seconds