Mortgage Mistakes? Demographic Factors Associated with Problematic Loan Application Behaviors

Abstract:     
Using 2005 Home Mortgage Disclosure Act data, this study explores problematic mortgage application behaviors including submitting incomplete paperwork when seeking a mortgage, withdrawing a loan application before the lender makes a credit decision, rejecting a lender approved loan offer and accepting a high interest rate loan. Tract-level college completion rates, homeownership rates, and household age, as well as race, ethnicity, and income are all associated with problematic loan application behaviors, although these relationships vary across behaviors. The results of this analysis may prove useful for targeting financial education and counseling efforts to areas with the greater potential needs.

Number of Pages in PDF File: 35

Keywords: financial capability, financial education and counseling, mortgage application behavior

JEL Classification: D10, D12, D14, D83, G21

working papers series