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Medientyp:
E-Artikel
Titel:
Role of the Community Reinvestment Act in Mortgage Supply and the U.S. Housing Boom
Beteiligte:
Saadi, Vahid
Erschienen:
Oxford University Press (OUP), 2020
Erschienen in:
The Review of Financial Studies, 33 (2020) 11, Seite 5288-5332
Sprache:
Englisch
DOI:
10.1093/rfs/hhaa023
ISSN:
0893-9454;
1465-7368
Entstehung:
Anmerkungen:
Beschreibung:
Abstract This paper studies the role of the Community Reinvestment Act (CRA) in the U.S. housing boom-bust cycle. I find that enhanced CRA enforcement in 1998 increased the growth rate of mortgage lending by CRA-regulated banks to CRA-eligible census tracts. I show that during the boom period house price growth was higher in the eligible census tracts because of the shift in mortgage supply of regulated banks. Consequently, these census tracts experienced a worse housing bust. I find that CRA-induced mortgages were awarded to borrowers with lower FICO scores and were more frequently delinquent.