Financial Literacy, Broker-Borrower Interaction, and Mortgage Default

Real Estate Economics, Forthcoming

Posted: 20 Mar 2015

Multiple version iconThere are 2 versions of this paper

Date Written: January 25, 2015


This paper examines the relationship between broker-borrower interaction in the origination process and subsequent mortgage performance. I show that face-to-face interaction between a mortgage broker and borrower before the loan funds is associated with lower levels of ex post default. The relation between face-to-face broker-borrower interaction and mortgage performance holds only for borrowers that have characteristics associated with low levels of financial literacy. Specifically, face-to-face interaction is negatively related to default for minorities, borrowers located in areas with low levels of education, low-income borrowers, and borrowers with low FICO scores. My results suggest that face-to-face interaction between the mortgage broker and borrower may reduce problems associated with financial illiteracy.

Keywords: Financial Literacy, Mortgage Brokerage, Default

Suggested Citation

Conklin, James, Financial Literacy, Broker-Borrower Interaction, and Mortgage Default (January 25, 2015). Real Estate Economics, Forthcoming, Available at SSRN:

James Conklin (Contact Author)

University of Georgia ( email )

Athens, GA 30602-6254
United States

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