Mortgage Default Rates and Borrower Race

Anderson, Richard; Vanderhoff, James

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Mortgage Default Rates and Borrower Race

Journal of Real Estate Research, Vol. 18, No. 2, 1999

11 Pages Posted: 10 Mar 2013

See all articles by Richard Anderson

Richard Anderson

Stevens Institute of Technology, Wesley J. Howe School of Technology Management

James Vanderhoff

Rutgers University

Date Written: September 1, 1999

Abstract

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.

Keywords: Discrimination, Lending, Mortgage, Race, Racial

JEL Classification: D90

Suggested Citation: Suggested Citation

Anderson, Richard and Vanderhoff, James H., Mortgage Default Rates and Borrower Race (September 1, 1999). Journal of Real Estate Research, Vol. 18, No. 2, 1999, Available at SSRN: https://ssrn.com/abstract=2230571