Mortgage Default Rates and Borrower Race

Posted: 1 Nov 1999


We estimate a mortgage default model with national data on conventional mortgages that were current from 1986 to 1992. Our analysis confirms the results of previous analyses of Federal Housing Authority mortgages: Black households have higher marginal default rates, controlling for differences in borrower and property characteristics. Further, we do not find that Black borrowers have significantly more home equity. These results do not provide evidence of racial discrimination in mortgage lending and suggest that differences in default costs or transaction costs may explain differences in default rates.

JEL Classification: G21, R39, J71

Suggested Citation

Anderson, Richard and Vanderhoff, James H., Mortgage Default Rates and Borrower Race. Available at SSRN:

Richard Anderson (Contact Author)

New Jersey City University ( email )

2039 Kennedy Boulevard
Dept. of Economics
Jersey City, NJ 07305-1597
United States
201-262-4024 (Phone)
201-200-2285 (Fax)

James H. Vanderhoff

Rutgers University ( email )

360 ML King Jr. Blvd.
Newark, NJ 07102
United States
973-353-5256 (Phone)
973-353-5259 (Fax)

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