Religion and Mortgage Misrepresentation

43 Pages Posted: 15 Jan 2020 Last revised: 7 Jul 2020

See all articles by James Conklin

James Conklin

University of Georgia

Moussa Diop

University of Southern California

Mingming Qiu

Michigan State University - Department of Finance

Date Written: December 26, 2019


We investigate whether religion acts as a deterrent to the types of mortgage misrepresentation that played a significant role in the recent housing boom and bust. Using a large sample of mortgages originated from 2000 to 2007, we provide evidence that local religious adherence (religiosity) is associated with a lower likelihood of appraisal overstatement and owner occupancy misreporting. The evidence on income misrepresentation is mixed. Religiosity does not appear to reduce the incidence of income misrepresentation; however, it seems to restrain the degree to which income is misrepresented. Our results are generally consistent with the hypothesis that religion, as a set of social norms, fosters ethical behavior, and possibly risk aversion, in the mortgage market.

Keywords: Mortgage Fraud, Ethical Behavior, Religion, Risk Aversion, Appraisal Bias, Owner Occupancy Misreporting, Income Documentation, Liars Loans

JEL Classification: G21, G31,G32, R3

Suggested Citation

Conklin, James and Diop, Moussa and Qiu, Mingming, Religion and Mortgage Misrepresentation (December 26, 2019). Available at SSRN: or

James Conklin

University of Georgia ( email )

Athens, GA 30602-6254
United States

Moussa Diop

University of Southern California ( email )

Sol Price School of Public Policy
RGL 315
Los Angeles, CA 90089
United States
(213)821-0467 (Phone)

Mingming Qiu (Contact Author)

Michigan State University - Department of Finance ( email )

315 Eppley Center
East Lansing, MI 48824-1122
United States
5178842995 (Phone)

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