Ethno-racial stratification in the mortgage market: The role of co-applicants

Loya, José

doi:10.1016/j.ssresearch.2022.102725

Cited by 12 publications

(6 citation statements)

References 37 publications

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“…Reliable and transparent data systems are necessary for exposing ongoing inequities. For example, despite the enactment of the Fair Housing Act (FHA) more than 50 y ago, studies continue to find persistent ethno-racial disparities in the home mortgage market ( 16 , 17 ). These studies are only possible because of the 1975 Home Mortgage Disclosure Act (HMDA) requiring lenders to report loan-level data that includes borrower characteristics relevant to the FHA (e.g., race/ethnicity).…”

Section: Discussionmentioning

confidence: 99%

A comprehensive demographic profile of the US evicted population

Graetz,

Gershenson,

Hepburn

et al. 2023

Proc. Natl. Acad. Sci. U.S.A.

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Millions of American renter households every year are threatened with eviction, an event associated with severe negative impacts on health and economic well-being. Yet we know little about the characteristics of individuals living in these households. Here, we link 38 million eviction court cases to US Census Bureau data to show that 7.6 million people, including 2.9 million children, faced the threat of eviction each year between 2007 and 2016. Overall, adult renters living with at least one child in their home were threatened with eviction at an annual rate of 10.4%, twice that of adults without children (5.0%). We demonstrate not only that the average evicted household includes one child, but that the most common age to experience eviction in America is during childhood. We also find that previous studies have underestimated racial disparities in eviction risk: Despite making up only 18.6% of all renters, Black Americans account for 51.1% of those affected by eviction filings and 43.4% of those evicted. Roughly one in five Black Americans living in a renter household is threatened with eviction annually, while one in ten is evicted. Black–White disparities persist across levels of income and vary by state. In providing the most comprehensive description to date of the population of US renters facing eviction, our study reveals a significant undercount of individuals impacted by eviction and motivates policies designed to stabilize housing for children and families.

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Section: Discussionmentioning

confidence: 99%

A comprehensive demographic profile of the US evicted population

Graetz,

Gershenson,

Hepburn

et al. 2023

Proc. Natl. Acad. Sci. U.S.A.

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“…Regardless of the precise mechanisms, it seems that the large gender gap among black and Latino couples in mortgage access is more the norm than the exception. Unlike previous studies that examine the intersection of gender and race and ethnicity in the housing market (Allen 2009;Baker 2014;Loya 2022b), by considering the co-applicant status, this study demonstrates the structural disadvantages women of color face in a unique way. Gender inequality is potentially overlooked in the mortgage market when there is no distinction between single applicants and co-applicants.…”

Section: Discussionmentioning

confidence: 66%

Gender and ethno‐racial disparities in access to mortgage credit

Loya

2023

Social Science Quarterly

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There is a long history of gender and ethno‐racial stratification in access to homeownership. Previous research highlights unequal treatment of minorities and women in the mortgage market. However, prior studies focus on single loan applicants when assessing the roles of both gender and race and ethnicity in their analysis. Because of this, it is unclear how mortgage lending disparities differ when considering the intersection of gender and race and ethnicity across single and co‐applicants. This paper draws on annual data from the 2018 and 2019 Home Mortgage Disclosure Act (HMDA) to assess gender and ethno‐racial disparities in loan outcomes. I document two diverging trends. On the one hand, single applicant women generally perform similarly or outperform single applicant men in the mortgage market even across ethno‐racial groups. On the other hand, women‐headed co‐applicants are more likely to experience an adverse loan outcome compared to male‐headed co‐applicants. The gender gap is substantially larger for black and Latino co‐applicants than for white co‐applicants. This is particularly true for black women‐ and Latina‐headed co‐applicants when examining mortgage denials. The results for Asian co‐applicants are mixed, as gender disparities differ across mortgage outcomes. Implications for gender and ethno‐racial stratification are discussed.

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“…3 The COVID-19 pandemic altered the U.S. economy during 2020, which may have changed the behaviors of both the applicants and the financial institutions in the housing market. I also restricted the sample to single applicants and ethno-racially homogenous co-applicants to avoid the impact of interracial couples in assessing the ethno-racial hierarchy in the refinance mortgage market (Loya 2022c). Finally, I restrict the sample to White, Black, Latino, and Asian applicants, excluding Native Americans and Pacific Islanders due to their small sample size in certain U.S. regions.…”

Section: Methodsmentioning

confidence: 99%

“…On the other hand, differential loan outcomes across ethno-racial groups regardless of the loan purpose may suggest that the ethno-racial hierarchy is maintained and reproduced in the refinanced mortgage market. If loan outcomes are mixed across ethno-racial groups and by loan purpose, this may suggest that certain elements of the ethno-racial hierarchy may be more flexible, depending on the ethno-racial groups involved and the reason for their refinanced loan (Bonilla-Silva 2004;Charles 2000;Loya 2022c;Massey 2005). The flexibility of the ethno-racial hierarchy may stem from the relative position of Asians and Latinos within the ethno-racial hierarchy across different social dimensions (Cobas, Duany, and Feagin 2009;Kim 1999;Loya 2022a;O'Brien 2008).…”

Section: Wealth and Mortgage Refinance Disparitiesmentioning

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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Ethno-racial stratification in the mortgage market: The role of co-applicants

Cited by 12 publications

References 37 publications

A comprehensive demographic profile of the US evicted population

A comprehensive demographic profile of the US evicted population

Gender and ethno‐racial disparities in access to mortgage credit

Ethno-Racial Stratification in the Refinanced Mortgage Market

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