Ethno-Racial Disparities in Adverse Experiences at Mortgage Closing: Evidence From the National Survey of Mortgage Originations

Loya, José

doi:10.1080/10511482.2022.2070653

Cited by 5 publications

(1 citation statement)

References 36 publications

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“…Ethno-racial disparities in homeownership remain even after accounting for socio-demographic characteristics, thus pointing to the importance of ethno-racial stratification and discrimination in homeownership (Faber and Ellen 2016; Flippen 2010; Haurin, Herbert, and Rosenthal 2007; Loya 2022b; Schuetz, Been, and Ellen 2008). To illustrate, minorities are more likely to withdraw their mortgage application, receive poor service from real estate agents, obtain alternative and higher cost loans, and be steered toward lower quality homes in low-income and minority neighborhoods compared to Whites (Adelman 2005; Bond and Williams 2007; Dwyer 2007; Haupert 2022; Iceland and Wilkes 2006; Massey et al 2016; Roscigno, Karafin, and Tester 2009; Turner et al 2002).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Ethno-Racial Stratification in the Refinanced Mortgage Market

Loya

2023

Sociology of Race and Ethnicity

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The mortgage industry is a key component of ethno-racial stratification in wealth and homeownership. Previous research demonstrates that unequal treatment of minorities has created inequality in access and exclusion to low-cost mortgage loans in the housing market. While prior studies have documented the disadvantages Black and Latino home seekers face in obtaining a mortgage, these studies have not considered the obstacles that current homeowners face when seeking to refinance their mortgage. This study draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2018 to 2019 to assess ethno-racial disparities in refinanced mortgage outcomes by loan purpose. I demonstrate that loan rejections and high-cost loans are highest among Black homeowners seeking to refinance their home, especially when trying to make home improvements or cashing-out equity from their home. In general, Asians and Latinos perform in between Whites and Blacks across mortgage outcomes and loan purpose. These trends are particularly true when examining adverse loan outcomes for applicants seeking a cash-out refinance. Implications for ethno-racial stratification and the wealth gap are discussed.

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