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Get Why Default Rates Cannot Shed Light On Mortgage ... - HUD User - Huduser

Al discrimination in mortgage lending can be observed in default rates. Since lenders who discriminate require higher standards for minority applicants than whites, successful minority applicants are more creditworthy and should default less often. But this conclusion requires three strong assumptions: (1) that credit characteristics not observed by the lender are uncorrelated with minority status, (2) that whites do not receive more favorable treatment than minorities in foreclosure proceedings.

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