Real Denial Rates

Working Paper

Real Denial Rates

A Better Way to Look at Who Is Receiving Mortgage Credit

Abstract

This paper updates the current denial rate for mortgages using the real denial rate (RDR) methodology developed in 2014. The RDR improves on the traditional denial rate measurement because it takes into account the differences in credit worthiness among borrowers. Accordingly, our RDR more accurately reveals the current levels of mortgage credit accessibility. Our updated results show that conventional mortgages have higher denial rates than government mortgages, racial and ethnic differences are smaller than the traditional denial rate method indicates but are not eliminated, and small-dollar mortgages have significantly higher real denial rates, particularly in the government loan channel.

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