Market segmentation and lender specialization in the primary and secondary mortgage markets

Abstract

This paper provides a comprehensive evaluation of market segmentation and lender/purchaser specialization in the primary and secondary mortgage markets. It describes and assesses the 1990 Home Mortgage Disclosure Act (HMDA) data, which for the first time provide detailed information on the borrower and neighborhood racial and income characteristics of mortgage loan originations and securitizations in the primary and secondary mortgage markets. Evidence presented in the paper indicates that home purchase loan origination rates for black applicants—and, to a lesser degree, Hispanic applicants—appear to be significantly lower than those of other racial or ethnic groups. Similarly, the HMDA data reveal that home purchase mortgage origination rates in predominantly minority census tracts are significantly lower than those in predominantly white neighborhoods. The HMDA data also indicate a striking reliance of black borrowers on government‐backed forms of mortgage credit.

The paper further reveals that secondary market loan purchase distributions arrayed by borrower and neighborhood characteristics generally reflect those of home mortgage originations. The borrower and locational characteristics of home purchase loans acquired by the Government National Mortgage Association (GNMA) directly reflect that agency's legislated specialization in government‐backed loans, whereas the characteristics of loans acquired by Fannie Mae and Freddie Mac for the most part derive from the borrower and geographic composition of conventional home purchase loan originations. Findings of analyses of HMDA data raise concern regarding the access of minority and low‐income households and neighborhoods to mortgage finance. Those results also raise some question as to whether the federally chartered agencies in the secondary market are adequately promoting the availability of mortgage credit to low‐ and moderate‐income and minority households.     

Typologies of Household Risk-Taking: Contemporary Rural Russia as a Case Study

In the post-Soviet economic environment, new opportunities arose attendant with market reform. Rural households had to choose whether to continue past behaviors – to subsist – or to adapt, the latter requiring a degree of risk. This paper analyzes risk-averse and risk-taking households by addressing three main questions: (a) which households are risk-averse and which are risk-takers?; (b) what are the characteristics of those different types of households?; and (c) which factors have greatest causal properties in explaining household risk-taking? Typologies of risk-averse and risk-taking households are presented. Using survey data, statistical analysis disaggregates peasant households, showing that households with higher total income are more likely to take on risk. Land expansion is important mainly for commercially oriented households.     

The county administrator and productivity improvement: An examination of contrasting styles

The study examines productivity improvement efforts among a sample of United States County Administrators. Administrators' actions were divided into “tough” and “soft” approaches which were then examined in light of external and internal environment, governmental actors, duties of the office, management and policy actions and roles, and personal and demographic characteristics. Strong correlates were found in the areas of external environment, managerial role, and personal characteristics.