The Influence of Race in Residential Mortgage Closings

Abstract:     
This study examines how applicants identified as Asian, Black or Hispanic differ in mortgage closing outcomes compared to the remaining applicants. First, the findings show that minority applicants are somewhat less likely to close a loan for purchase, but equally likely to close a loan for refinance. A more important question this study addresses is whether minority borrowers have less efficient closing outcomes. The findings show no statistical difference between minority and non-minority applicants. This indicates that originators do not demonstrate a "taste for discrimination" by basing their loan approval for minorities on whether the loan can be profitably sold.

Number of Pages in PDF File: 14

Keywords: minority, mortgage closing, minority borrower

JEL Classification: G21, K11, K12, J11, J15, P46, R11, R21, R31

Accepted Paper Series