Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/302195 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 2024-6
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
We study the effect of Department of Justice lawsuits in the 2010s against large lenders for alleged fraud in the Federal Housing Administration (FHA) mortgage insurance program. The suits led to more than $5 billion in settlements and caused targeted banks and their peers to precipitously exit the FHA market. Difference-in-differences and triple differences tests exploiting geographic variation in exposure to exiting banks show a 20 percent reduction in FHA lending in heavily exposed areas. This reduction was not associated with improved underwriting standards or lower default rates. Large banks' FHA exit has significantly reduced low-income households' overall access to mortgage credit.
Subjects: 
household finance
banking
mortgage
credit access
litigation
JEL: 
G18
G21
G51
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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