Analyzing Determinants of Foreclosure of Middle-Income Borrowers of Color in the Atlanta, GA Metropolitan Area

36 Pages Posted: 15 Jul 2012  

Katrin B. Anacker

George Mason University - School of Policy, Government, and International Affairs

James H. Carr

Federal National Mortgage Association (Fannie Mae)

Archana Pradhan

National Community Reinvestment Coalition (NCRC)

Date Written: July 14, 2012

Abstract

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.

Keywords: foreclosure, borrowers of color, communities of color, housing equity, U.S., Atlanta, GA metropolitan area, logistic regression

JEL Classification: C12, C20, C51, D63

Suggested Citation

Anacker, Katrin B. and Carr, James H. and Pradhan, Archana, Analyzing Determinants of Foreclosure of Middle-Income Borrowers of Color in the Atlanta, GA Metropolitan Area (July 14, 2012). GMU School of Public Policy Research Paper No. 2013-01. Available at SSRN: https://ssrn.com/abstract=2106055 or http://dx.doi.org/10.2139/ssrn.2106055

Katrin B. Anacker (Contact Author)

George Mason University - School of Policy, Government, and International Affairs ( email )

Founders Hall
3351 Fairfax Dr.
Arlington, VA 22201
United States

James H. Carr

Federal National Mortgage Association (Fannie Mae) ( email )

3900 Wisconsin Avenue, NW
Washington, DC 20016-2892
United States

Archana Pradhan

National Community Reinvestment Coalition (NCRC) ( email )

727 15th Street, NW, Suite 900
Washington, DC 20005
United States

Paper statistics

Downloads
83
Rank
241,957
Abstract Views
1,145