Hola Bird

Main Menu

  • Latino Finance
  • Latino Loans
  • Hispanic Mortgages
  • Latino Economies
  • Capital

Hola Bird

Header Banner

Hola Bird

  • Latino Finance
  • Latino Loans
  • Hispanic Mortgages
  • Latino Economies
  • Capital
Hispanic Mortgages
Home›Hispanic Mortgages›John Hood: Mortgage discrimination complaints redundant | Chroniclers

John Hood: Mortgage discrimination complaints redundant | Chroniclers

By Eric P. Wolf
October 24, 2021
0
0

Returning to the issue of mortgages, attempts to prove discrimination by looking at loan approval rates, as the Markup / AP team attempted to do, are wrong. External analysts don’t have the full set of information about loan applicants, including credit scores, that financial institutions use to guide their decisions.

A more revealing approach is to look not at the “front end” of the process, so to speak, but the “back end”. How often do borrowers default on their mortgages? If lenders make their decisions without prejudice, then the default rates for, say, white and Hispanic customers should be about the same. That is, default rates would show that lenders are just as willing to take a risk with a white candidate as they are with an otherwise comparable Hispanic candidate.

If, on the other hand, a lender takes ethnicity into account and assumes that whites are more trustworthy – more likely to repay their loans – than Hispanics, then the lender will give more loans to white applicants than are Hispanics. ‘to Hispanic applicants with the same income. , debts, credit scores and financial history. This, in turn, means that the aggrieved lender will experience a lower average default rate for Hispanic customers than for white customers.

The statistical analysis involved is a bit more complicated than any brief explanation can express, I admit, and over time economists have argued convincingly that default rate data must themselves be risk-adjusted. Yet if someone claims to assess the extent of loan discrimination without paying close attention to default rates, that person is either misinformed or is actively trying to misinform.


Source link

Related posts:

  1. Housing market on fire: 5 ways this boom has nothing to do with the latest
  2. The CFPB sees its mortgage complaints increase
  3. American Watchdog Says Black, Hispanic Owners More Likely To Be On Withdrawal Program
  4. The Bay Area is losing Latino owners. Where are they going?

Recent Posts

  • Crypto can be a driver for racial equity
  • Special Feature: “Eyewitness News Guide to Inflation”
  • Kentucky attorney general files case for 2023 gubernatorial race
  • Annual Latino Conference moves to Allentown – Times News Online
  • New U.S. Funding Wins Six Stevie® American Business Awards®

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021

Categories

  • Capital
  • Hispanic Mortgages
  • Latino Economies
  • Latino Finance
  • Latino Loans
  • Terms and Conditions
  • Privacy Policy