The 2008 HMDA Data: The Mortgage Market during a Turbulent Year

Avery, Robert B.; Bhutta, Neil; Brevoort, Kenneth P.; Canner, Glenn B.; Gibbs, Christa

doi:10.17016/bulletin.2010.96-4

Cited by 14 publications

(6 citation statements)

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“…Consequently, we cannot assess how lending changes following the increase in the maximum deposit insurance because the dates (of loan application and origination) are unavailable on the public version of HMDA. In addition, due to size threshold criteria, most credit unions are too small to be included in the HMDA dataset (Avery et al, 2010;van Rijn and Li, 2019).…”

Section: Loan Categoriesmentioning

confidence: 99%

Deposit insurance and credit union lending

Nguyen

Wilson

et al. 2022

Journal of Financial Stability

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Section: Loan Categoriesmentioning

confidence: 99%

Deposit insurance and credit union lending

Nguyen

Wilson

et al. 2022

Journal of Financial Stability

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“…If income is not misreported, 12 then it is high. According to HMDA data (Avery et al 2010), average income for all borrowers in 2007 was $97,700 and $85,600 for borrowers with a high-cost (i.e., subprime) loan, as described in the Variables section. While this could present a potential threat to validity, subsequent analysis reveals that income for all borrowers would have to be negative in order to eliminate the main result, the negative impact of racial segregation on a borrower's risk of foreclosure, as detailed in Appendix A.2.…”

Section: Variablesmentioning

confidence: 99%

Rethinking the Role of Racial Segregation in the American Foreclosure Crisis

Latner¹

2017

City & Community

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Racial segregation is an important factor in understanding the foreclosure crisis, but must be understood to operate in particular and specific ways. The primary, positive impact of segregation on foreclosure risk operates prior to loan origination through the differential access to loan quality by race. Afterward, the impact of segregation is negative. Drawing on a rare dataset of loans that combine loan performance and borrower characteristics, I use a competing risks proportional hazard model to examine the impact of race and racial segregation on risk of foreclosure among borrowers. Results indicate that Black segregation has a large, negative impact on foreclosure risk. Instead, the strongest positive contributor to foreclosure is the negative value of the home relative to the balance of the loan (i.e., “underwater,” as measured by the put option), which is also the mechanism that explains most of the difference in the foreclosure rate by race. The negative impact of racial segregation on foreclosure risk is the result of a mismatch between cities with high levels of segregation and cities with large declines in home prices and related foreclosures.

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“…The housing market saw a sea change along many dimensions following the onset of the financial crisis. Amidst the steep decline in housing prices, soaring delinquencies and mortgage defaults, the collapse of prominent mortgage lenders, and the conservatorship of Fannie Mae and Freddie Mac, the number of purchase originations plunged to about half their previously prevailing levels (see Avery et al (2010aAvery et al ( , 2010b). This can be seen in Figure 1A, which shows monthly purchase applications and originations from the Home Mortgage Disclosure Act (HMDA) data during 2003-2014.…”

Section: Data and Stylized Factsmentioning

confidence: 99%

Crowding Out Effects of Refinancing on New Purchase Mortgages

Sharpe

Sherlund

2015

SSRN Journal

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We present evidence that binding mortgage processing capacity constraints reduce mortgage originations to borrowers with low to modest credit scores. Mortgage processing capacity constraints typically bind when the demand for mortgage refinancing shifts outward, usually because of lower mortgage rates. As a result, high capacity utilization leads mortgage lenders to ration mortgage credit, completing mortgages that require less underwriting resources, and are thus less costly, to produce. This is hypothesized to have a particularly adverse impact on relatively higher credit-risk borrowers' ability to obtain mortgages. What is more, we show that, by lowering capacity utilization, a rise in interest rates can, under certain circumstances, induce an increase in mortgage originations to relatively higher risk borrowers. In particular, we find fairly large effects for purchasing borrowers with low to modest credit scores, in which we find that a decrease in capacity utilization of 4 applications per mortgage employee (similar to that observed from 2012 to 2013) could result in increased purchase mortgage originations, as the relaxed capacity constraint might have offset any negative effect on mortgage demand from higher interest rates.

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The 2008 HMDA Data: The Mortgage Market during a Turbulent Year

Cited by 14 publications

References 0 publications

Deposit insurance and credit union lending

Deposit insurance and credit union lending

Rethinking the Role of Racial Segregation in the American Foreclosure Crisis

Crowding Out Effects of Refinancing on New Purchase Mortgages

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