The Impact of Minority Representation at Mortgage Lenders

W. Scott FRAME; Ruidi HUANG; Erica Xuewei JIANG; Yeonjoon LEE; Will Shuo LIU; Erik J. MAYER; Adi SUNDERAM

doi:10.1111/jofi.13428

The Impact of Minority Representation at Mortgage Lenders

W. Scott FRAME
, Ruidi HUANG
, Erica Xuewei JIANG
, Yeonjoon LEE
, Will Shuo LIU
, Erik J. MAYER
, Adi SUNDERAM^*

^*Corresponding author for this work

Department of Economics and Finance

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

9 Citations (Scopus)

Abstract

We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers’ access to credit.

© 2025 the American Finance Association

Original language	English
Pages (from-to)	1209-1260
Journal	The Journal of Finance
Volume	80
Issue number	2
Online published	11 Feb 2025
DOIs	https://doi.org/10.1111/jofi.13428
Publication status	Published - Apr 2025

Bibliographical note

Research Unit(s) information for this publication is provided by the author(s) concerned.

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title = "The Impact of Minority Representation at Mortgage Lenders",

abstract = "We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers{\textquoteright} access to credit. {\textcopyright} 2025 the American Finance Association",

author = "FRAME, \{W. Scott\} and Ruidi HUANG and JIANG, \{Erica Xuewei\} and Yeonjoon LEE and LIU, \{Will Shuo\} and MAYER, \{Erik J.\} and Adi SUNDERAM",

note = "Research Unit(s) information for this publication is provided by the author(s) concerned.",

year = "2025",

month = apr,

doi = "10.1111/jofi.13428",

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pages = "1209--1260",

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AU - FRAME, W. Scott

AU - HUANG, Ruidi

AU - JIANG, Erica Xuewei

AU - LEE, Yeonjoon

AU - LIU, Will Shuo

AU - MAYER, Erik J.

AU - SUNDERAM, Adi

N1 - Research Unit(s) information for this publication is provided by the author(s) concerned.

PY - 2025/4

Y1 - 2025/4

N2 - We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers’ access to credit. © 2025 the American Finance Association

AB - We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers’ access to credit. © 2025 the American Finance Association

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ER -

The Impact of Minority Representation at Mortgage Lenders

Abstract

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