Mortgage Default Rates and Borrower Race

We estimate a mortgage default model with national data on conventional mortgages that were current from 1986 to 1992. Our analysis confirms the results of previous analyses of Federal Housing Authority mortgages: Black households have higher marginal default rates, controlling for differences in borrower and property characteristics. Further, we do not find that Black borrowers have significantly more home equity. These results do not provide evidence of racial discrimination in mortgage lending and suggest that differences in default costs or transaction costs may explain differences in default rates.

The Effects of County Population Diversity on Contributions, Membership, and Adherents in the Presbyterian Religion and on Adherence in Mainline Protestant Religions

In this research we use data from the Presbyterian Church (U.S.A.), 2005-2007 to study the effects of race and ethnic diversity in the county on religious membership and religious giving in Presbyterian congregations. We also use data from the Religious Congregations Membership Study 2000 to study the effects of race and ethnic diversity in the county on religious adherence in the Presbyterian Church (U.S.A.) and in other mainline Protestant denominations. We have found that the percent of the county population non white is positively and significantly related to contributions per member by Presbyterians and to membership in the Presbyterian Church (U.S.A.) at the congregation level and at the county level in multivariate statistical models. We have also found these results to hold at the county level for religious adherence in mainline Protestant denominations. These results are at odds with the view that increases in population diversity at the county level may lead to a decline in religious participation.religious membership, religious giving, population diversity, social capital

The Effect of Relative Pricing on the Fixed-Rate Mortgage Term Decision

This paper analyzes determinants of the fifteen- versus thirty-year fixed-rate mortgage (FRM) loan term decision. Because the thirty-year FRM may be converted (by partial prepayment) to the shorter term, the thirty-year instrument provides the implicit option to extend repayment. Relative rates measure the price (cost) of this option to the consumer. The results indicate that the term decision of consumers is highly sensitive to relative rates: probit estimates using data from a large national lending institution for the 1987 to 1990 period indicate that a 1% increase in the ratio of fifteen- to thirty-year rates lowers the probability of fifteen-year term choice by 20%. The results also indicate that expected housing price appreciation, which measures investment determinants of housing demand, is negatively related to the fifteen-year FRM term choice.

Adjustable- versus Fixed-Rate Mortgage Choice: The Role of Initial Rate Discounts

This paper investigates relative pricing determinants of the fixed-rate mortgage (FRM) versus adjustable-rate mortgage (ARM) decision. A probit model is estimated using data from a national sample of residential housing transactions for the 1986 and 1988 period. The results suggest that the probability of ARM choice is highly sensitive to ARM initial rate ("teaser") discounts and differences in the ratio of FRM to ARM points. In addition, the findings indicate that the level of local housing prices is an important determinant of ARM choice.

Racial Group Affinity and Religious Giving: Evidence from Congregation-Level Panel Data

Since giving to religious organizations constitutes a substantial portion of total charitable giving, an understanding of the determinants of religious giving is a vital policy concern. Drawing on a novel congregation-level panel dataset, we examine whether religious giving is driven by preferences for racial group affinity, that is, loyalty to one's own racial group. To address endogeneity concerns, we combine a fixed effects estimation framework with an instrumental variable approach. We find robust evidence consistent with the racial group affinity motive: a decrease in the percent of whites in the county is ceteris paribus associated with a decrease in the total giving receipts collected by predominantly white congregations