Posted To: MND NewsWire
A recent research paper from the Urban Institute (UI) looks at the benefits provided by real denial rates (RDR) over the traditional measure of credit availability, the observed mortgage denial rate (ODR). The authors, Laurie Goodman and Bing Bai from UI and Wei Li of the Federal Deposit Insurance Corporation (FDIC) maintain that the ODR can be misleading. Higher denial rates can result from either a tight credit environment or because of an increase in applications from less creditworthy buyers and can affect measures over time, across credit channels and for demographic groups. Li and Goodman developed the RDR in 2014, and the current paper looks at five implications of their measure, updated with data through 2017. The ODR, which is based on Home Mortgage Disclosure Act (HMDA) data, understates...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
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