Work

The Role of Technology in Mortgage Lending

Year: 2019

Type: article

Abstract: Technology-based ("FinTech") lenders increased their market share of U.S. mortgage lending from 2% to 8% from 2010 to 2016. Using loan-level data on mortgage applications and originations, we show that FinTech lenders process mortgage applications 20% faster than other lenders, controlling for observable characteristics. Faster processing does not come at the cost of higher defaults. FinTech lenders adjust supply more elastically than do other lenders in response to exogenous mortgage demand shocks. In areas with more FinTech lending, borrowers refinance more, especially when it is in their interest. We find no evidence that FinTech lenders target borrowers with low access to finance.

Source: Review of Financial Studies

DOI: 10.1093/rfs/hhz018

Authors: Andreas Fuster, Matthew Plosser, Philipp Schnabl, James Vickery

Institutions: Swiss National Bank, Federal Reserve Bank of New York, Center for Economic and Policy Research, National Bureau of Economic Research, Centre for Economic Policy Research, New York University

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2943908192

FWCI: 105.5

Cites: 36

Cited by: 1,180

Related to: 10