Category: Financial Access

Reducing the Black-White Homeownership Gap through Underwriting Innovations

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This study updates mortgage market developments in the use of cash-flow information from bank accounts and utility, telecommunications, and rental payments history. The report highlights issues concerning data collection, standardization, and consumer protection regulation when using non-traditional financial data sources, as well as the impact of pricing, servicing, and regulation in determining whether the use of such data sources enhances racial equity.

Jung Hyun Choi et al., Urban Institute

Lessons Learned from Mortgage Borrower Policies and Outcomes during the COVID-19 Pandemic

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This study analyzes the aggregate impacts of mortgage forbearances and the Federal Reserve’s large-scale asset purchase program through Q3 2021 with a particular eye toward effects on different racial and ethnic groups.

Kristopher Gerardi, Lauren Lambie-Hanson, and Paul Willen; Federal Reserve Bank of Boston Current Policy Perspectives

FinTech in Financial Inclusion: Machine Learning Applications in Assessing Credit Risk

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This paper provides a nontechnical overview of common machine learning algorithms used in underwriting credit. It provides a review – including strengths and weakness – of common machine learning techniques in credit underwriting, including tree-based models, support vector machines, and neural networks. The paper also considers the financial inclusion implications of machine learning, nontraditional data, and fintech.

Majid Bazarbash, International Monetary Fund (IMF)

On the Rise of the FinTechs—Credit Scoring using Digital Footprints

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This paper evaluates users’ digital footprints or the information that people leave online by accessing or registering a website to predict consumers’ likelihood of default. Using more than 250,000 observations, the authors show that information gleaned from people’s digital footprint can be equal to or even exceed the information content of credit bureau scores.

FDIC Center for Financial Research Working Paper No. 2018-04

Tobias Berg, Valentin Burg, Ana Gombovic and Manju Puri

Data point: The geography of credit invisibility

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This paper examines geographic patterns to assess the extent to which where one resides is correlated with one’s likelihood of remaining credit invisible. The paper explores the following topics: credit deserts, credit invisibility in rural and urban areas, entry products by geography, and credit invisibility.

The Bureau of Consumer Financial Protection’s Office of Research

Kenneth Brevoort, Jasper Clarkberg, Michelle Kambara, and Benjamin Litwin.

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