This paper examines racial and ethnic differences in high-cost mortgage lending in seven diverse metropolitan areas from 2004 to 2007. Controlling for credit score and other risk factors, AfricanAmerican and Hispanic borrowers are 103% and 78% more likely to receive high-cost mortgages for home purchases. Alarge part of the increase is attributable to sorting across lenders (55%-65%), and this, in turn, can be largely accounted for by the lender’s ex post foreclosure risk. The remaining within-lender differences are also concentrated in high-risk lenders, revealing the central role of these institutions in explaining market-wide racial and ethnic differences.

This paper examines racial and ethnic differences in high-cost mortgage lending in seven diverse metropolitan areas from 2004 to 2007. Controlling for credit score and other risk factors, African American and Hispanic borrowers are 103% and 78% more likely to receive high-cost mortgages for home purchases. A large part of the increase is attributable to sorting across lenders (55%-65%), and this, in turn, can be largely accounted for by the lender’s ex post foreclosure risk. The remaining within-lender differences are also concentrated in high-risk lenders, revealing the central role of these institutions in explaining market-wide racial and ethnic differences. Received December, 17 2014; editorial decision January 20, 2017 by Editor Philip Strahan.

We examine the housing market and residential mobility changes that occur soon after a Title 1 school fails to achieve adequate yearly progress (AYP) in Charlotte, North Carolina. Students within attendance zones of failing schools are given priority in lotteries for oversubscribed schools, potentially increasing the attractiveness of living in a failing school attendance zone. We find that housing prices, home buyer income, and the probability of attending a nonassigned school increase in the highest-quality neighborhoods within failing school attendance zones. Our results are driven largely by the behavior of new residents.