Fintech Lending and Mortgage Credit Access

46 Pages Posted: 27 Nov 2019

See all articles by Julapa Jagtiani

Julapa Jagtiani

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Lauren Lambie-Hanson

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Timothy Lambie-Hanson

Suffolk University

Multiple version iconThere are 2 versions of this paper

Date Written: November, 2019

Abstract

Following the 2008 financial crisis, mortgage credit tightened and banks lost significant mortgage market share to nonbank lenders, including to fintech firms recently. Have fintech firms expanded credit access, or are their customers similar to those of traditional lenders? Unlike in small business and unsecured consumers lending, fintech mortgage lenders do not have the same incentives or flexibility to use alternative data for credit decisions because of stringent mortgage origination requirements. Fintech loans are broadly similar to those made by traditional lenders, despite innovations in the marketing and the application process. However, nonbanks market to consumers with weaker credit scores than do banks, and fintech lenders have greater market shares in areas with lower credit scores and higher mortgage denial rates.

Keywords: fintech, mortgage lending, homeownership, online mortgages, credit access

JEL Classification: G20, G21, G28, R20, R30

Suggested Citation

Jagtiani, Julapa A. and Lambie-Hanson, Lauren and Lambie-Hanson, Timothy, Fintech Lending and Mortgage Credit Access (November, 2019). FRB of Philadelphia Working Paper No. 19-47, Available at SSRN: https://ssrn.com/abstract=3494195 or http://dx.doi.org/https://doi.org/10.21799/frbp.wp.2019.47

Julapa A. Jagtiani (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Lauren Lambie-Hanson

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

HOME PAGE: http://sites.google.com/laurenlambiehanson

Timothy Lambie-Hanson

Suffolk University ( email )

Boston, MA 02108
United States

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