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In spite of the recent impetus to reform home mortgage markets, particularly as they affect low- and moderate-income (LMI) households, little systematic evidence is available about how potential abuses in mortgage lending manifest in the mortgages held by those households. While racial discrimination in mortgage markets has a long history in the United States, the role of mortgage brokers in lending has only recently increased and become controversial. In this chapter, we uncover two mechanisms through which differential mortgage pricing occurs among LMI homeowners: black borrowers and borrowers who use mortgage brokers pay more for mortgage loans than other borrowers, after controlling for a wide variety of factors.


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