| Increasing homeownership has been a long-standing public policy goal in the United States (Rohe & Watson, 2007). Historically low- and moderate-income borrowers and minority groups have had a more difficult time gaining access to the mortgage lending market (Marsico, 2005). The market for mortgage lending is large, complex, and subject to a patchwork of regulations. It has also undergone significant changes over the last few decades. This study explores how organizational level factors (i.e., board composition with respect to community influentials and stakeholder outreach) and institutional factors influence rates of lending to low- and moderate-income borrowers. A two level hierarchical model including both fixed and random effects was used to analyze publicly available data provided by lenders under the Home Mortgage Disclosure Act. The results of the study were mixed. Higher peer levels of lending as well as being subject to the Community Reinvestment Act were associated with increased lending to low- and moderate-income borrowers. A greater number of activities toward certain stakeholders, surprisingly, was associated with a decrease in rates of lending to low- and moderate-income borrowers. There was no support for the presence of community influentials on the board affecting rates of lending to low- and moderate-income borrowers. |
