Lenders’ pricing strategy: Do neighborhood risks matter?
研究了政府支持企业贷款与非政府支持企业贷款的利率差异，发现前者利率随区域预付款风险变化，而后者主要取决于借款人和贷款特征。
Abstract This article explores the different pricing strategies of lenders who originate both government‐sponsored enterprise (GSE) and non‐GSE loans. We find that conditional on loan and borrower characteristics and some observable local economic factors, mortgage rates on GSE loans vary significantly across regions. However, we observe no sizable regional variation in loan amounts or default risk. By contrast, the mortgage rates on non‐GSE loans depend almost entirely on borrowers and loan characteristics. In addition, we find that spatial variations in GSE mortgage rates are highly responsive to regional prepayment risk. Our results are robust to various controls for neighborhood characteristics, including regional‐level bank competition, borrower accessibility to mortgages, and household income levels. Overall, the findings offer a novel insight into how lenders adjust pricing strategies in response to a changing lending environment. The results provide implications relating to the present and imminent dangers of housing bubbles and the intensified refinancing wave following the COVID‐19 pandemic.