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  • 2022
  • Working Paper

The Impact of Minority Representation at Mortgage Lenders

By: W. Scott Frame, Ruidi Huang, Erik J. Mayer and Adi Sunderam
  • Format:Print
  • | Language:English
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Abstract

We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching the (near) universe of mortgage applications to loan officers, we find that minorities are significantly underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take-up a loan. These disparities are significantly reduced when minority borrowers work with minority loan officers. Minority borrowers working with minority loan officers also have lower default rates. Our results suggest that minority underrepresentation among loan officers has adverse effects on minority borrowers’ access to credit.

Keywords

Household Finance; Demographic Economics; Financial Institutions; Diversity; Prejudice and Bias; Mortgages; Banking Industry

Citation

Frame, W. Scott, Ruidi Huang, Erik J. Mayer, and Adi Sunderam. "The Impact of Minority Representation at Mortgage Lenders." NBER Working Paper Series, No. 30125, June 2022.
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About The Author

Adi Sunderam

Finance
→More Publications

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More from the Authors
  • A Quantity-Driven Theory of Term Premia and Exchange Rates By: Robin Greenwood, Samuel G. Hanson, Jeremy C. Stein and Adi Sunderam
  • Sharing Models to Interpret Data By: Joshua Schwartzstein and Adi Sunderam
  • Perceptions about Monetary Policy By: Michael D. Bauer, Carolin Pflueger and Adi Sunderam
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