Analyzing Determinants of Foreclosure of Middle-Income Borrowers of Color in the Atlanta, GA Metropolitan Area
Katrin B. Anacker
George Mason University - School of Policy, Government, and International Affairs
James H. Carr
Federal National Mortgage Association (Fannie Mae)
National Community Reinvestment Coalition (NCRC)
July 14, 2012
GMU School of Public Policy Research Paper No. 2013-01
Foreclosures have disproportionately affected borrowers and communities of color. Many studies have concentrated on the nation and specific metropolitan areas, but few academic studies have focused on Atlanta. Using a merged data set consisting of Home Mortgage Disclosure Act (HMDA), U.S. Census, and Lender Processing Services (LPS) data and utilizing a logistic regression model, we analyze the likelihood of foreclosure in the Atlanta, GA metropolitan area. We find that African American borrowers are 52 percent and Hispanic borrowers 159 percent more likely to go into foreclosure, controlling for key financial variables. We also find that African American middle-income borrowers are 35 percent more likely to go into foreclosure. Moreover, we find that exotic mortgage products, such as balloon mortgages, adjustable rate mortgages (ARMs) and mortgages with a prepayment penalty have a higher likelihood of foreclosure than standard 30-year fixed rate mortgages.
Number of Pages in PDF File: 36
Keywords: foreclosure, borrowers of color, communities of color, housing equity, U.S., Atlanta, GA metropolitan area, logistic regression
JEL Classification: C12, C20, C51, D63
Date posted: July 15, 2012
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