We have just published a brief on a really interesting paper by Natee Amornsiripanitch, a senior financial economist at the Philadelphia Fed, that explores the relationship between age and the probability of being denied a mortgage application. The paper uses Confidential Home Mortgage Disclosure Act data, which contain applicant and co-applicant age and a rich set of applicant, property, and loan characteristics.
Natee estimates an equation that relates rejection to applicants’ age, controlling for a host of applicant/loan/property characteristics, census tract, and lender. This specification makes it possible to estimate the conditional correlation between applicant’s age and mortgage application outcomes among individuals who applied for rate-and-term refinance loans under very similar circumstances.
Third, relative to race and ethnicity, applicant age is an equally important correlate of mortgage approval.