Discrimination in Mortgage Lending: Evidence from a Correspondence Experiment

Authors

Andrew Hanson, Marquette UniversityFollow
Zackary Hawley, Texas Christian UniversityFollow
Hal Martin, Georgia State UniversityFollow
Bo Liu, Georgia State UniversityFollow

Document Type

Article

Language

eng

Format of Original

18 p.

Publication Date

3-2016

Publisher

Elsevier

Source Publication

Journal of Urban Economics

Source ISSN

0094-1190

Abstract

We design and implement an experimental test for differential response by mortgage loan originators (MLOs) to requests for information about loans. Our e-mail correspondence experiment is designed to analyze differential treatment by client race and credit score. Our results show net discrimination by 1.8% of MLOs through non-response. We also find that MLOs offer more details about loans and are more likely to send follow up correspondence to whites. The effect of being African American on MLO response is equivalent to the effect of having a credit score that is 71 points lower.

Comments

Accepted version. Journal of Urban Economics, Vol. 92 (March 2016): 48-65. DOI. © 2016 Elsevier B.V. Used with permission.

Recommended Citation

Hanson, Andrew; Hawley, Zackary; Martin, Hal; and Liu, Bo, "Discrimination in Mortgage Lending: Evidence from a Correspondence Experiment" (2016). Economics Faculty Research and Publications. 555.
https://epublications.marquette.edu/econ_fac/555