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Bank branch presence and access to credit in low-to-moderate income neighborhoods

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Author Info
O. Emre Ergungor

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Abstract

Banks specialize in lending to informationally opaque borrowers by collecting soft information about them. Some researchers claim that this process requires a physical presence in the market to lower information collection costs. The author provides evidence in support of this argument in the mortgage market for low-income borrowers. Mortgage originations increase and interest spreads decline when there is a bank branch located in a low-to-moderate income neighborhood.

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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0616.

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Date of creation: 2006
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Handle: RePEc:fip:fedcwp:0616

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Keywords: Mortgage loans Branch banks

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Ozgur Emre Ergungor, 2007. "Foreclosures in Ohio: does lender type matter?," Working Paper 0724, Federal Reserve Bank of Cleveland. [Downloadable!]
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