ISSN:
1573-045X
Keywords:
mortgage interest rates
;
mortgage lending
;
Home Mortgage Disclosure Act
;
pricing strategy
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract In many metropolitan areas (MSAs) newspapers post mortgage terms for lenders in a manner designed to permit an easy comparison of discount points and note rates. Using these advertised rates for 73 lenders in three MSAs we examine 1) how applicants respond to short-run changes in relative rates, and 2) the relationship between the services provided and quality of applications received by lenders and their long-term market positions. We find that applicant flows increase when lenders lower their rates. We also find that persistent cross-lender differences in rates are associated with differences in product quality reflected in processing times, loan sales, and FHA/VA lending; and that high-risk borrowers tend to apply to lenders posting above-average rates.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00174548
Permalink