Sexual Orientation and Racial Discrimination in Mortgage Lending: An Audit Correspondence Field Experiment

Last registered on January 02, 2025

Pre-Trial

Trial Information

General Information

Title
Sexual Orientation and Racial Discrimination in Mortgage Lending: An Audit Correspondence Field Experiment
RCT ID
AEARCTR-0015081
Initial registration date
December 24, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 02, 2025, 7:13 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

Primary Investigator

Affiliation
Universidad de chile

Other Primary Investigator(s)

PI Affiliation
Tulane University
PI Affiliation
American University
PI Affiliation
Tulane University

Additional Trial Information

Status
On going
Start date
2024-04-03
End date
2027-09-30
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We conduct a national audit field experiment to quantify sexual orientation discrimination in access to mortgages. We focus on mortgage loan originators (MLOs), who help prospective borrowers get the right mortgage, working with the borrower from application and approval through the closing process (it can be a lending company, mortgage broker or loan officer). Discrimination by MLOs could lead to reduced access to mortgage loans and/or delays, lower loan amounts, or worse terms.
This research examines how mortgage loan originators (MLOs) respond to on-average identical emails inquiring about mortgage loans from different-gender or same-gender married couples. We ask two research questions: Do mortgage loan originators (MLOs) discriminate against credit-worthy individuals based on their sexual orientation? And What mechanisms drive potential differences in response rates to same and different-sex couples by MLOs?
External Link(s)

Registration Citation

Citation
Button, Patrick et al. 2025. "Sexual Orientation and Racial Discrimination in Mortgage Lending: An Audit Correspondence Field Experiment." AEA RCT Registry. January 02. https://doi.org/10.1257/rct.15081-1.0
Experimental Details

Interventions

Intervention(s)
We send emails to mortgage loan originators (MLOs) requesting assistance with obtaining a mortgage loan. Each MLO receives two emails from two fictitious married couples who are first-time homebuyers and are looking to get pre-qualified for a mortgage loan.
Each MLO will receive, in random order:
1. One email from a same-gender couple (randomized to be either female or male) and one email from a different-gender couple (randomized so that the email sender is either female or male.)
2. Independently and randomly assigned, one email from a White couple (both individuals with White-signaling names) and a second email from either an African American couple (African American-signaling names) or another White couple. The order of these emails is also randomly assigned.
Intervention Start Date
2024-04-03
Intervention End Date
2025-09-30

Primary Outcomes

Primary Outcomes (end points)
Our primary outcome variable will be the response rate.
Primary Outcomes (explanation)
We define a response as in Hanson et al. (2016): a non-automated response from an MLO sent within two weeks.

Secondary Outcomes

Secondary Outcomes (end points)
We will also measure a set of secondary outcome variables capturing the quality of the response. This set of secondary outcome variables is the same as in Hanson et al. (2016): wait time before receiving a response (total minutes, converted to fractional days); if the MLO sends a follow-up email; and email length (in characters). These are all objective quality measures. We might also include subjective measures using, for instance, sentiment analysis.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design

Our general experimental design follows those of similar email-correspondence studies (Ahmed and Hammarstedt 2009; Hanson et al. 2016; Giulietti, Tonin, and Vlassopoulos 2019; Schwegman 2019).

Treatment is clustered at the mortgage loan originator (MLO) levels, and we send two emails to each MLO. We paired our two emails to each MLO as follows. In random order, we sent one email from a same-gender couple (randomized to either be female or male), and one email from a different-gender couple (randomized so that the emailer is either female or male). Independently and in random order, one couple was always White (both individuals have White names), and the other couple was African American (both African American names) with 75% probability on average, and White otherwise. We varied the average probability of 75% for having an African American couple by the proportion African American in the metropolitan (or micropolitan) statistical area (MSA) so-as to make our sample of African American couples more population representative.
In addition to race and sexual orientation signals, we randomly vary some demographic and socioeconomic characteristics of prospective borrowers: credit scores, occupation, and fertility. We signal for creditworthiness by randomly assigning both the prospective borrower and their spouse either low credit scores, high credit scores, or no mention of credit scores, each with a probability of one third. We randomly include occupation and tenure of employment, which are both seen as important in the loan decision. Using data from the U.S. Bureau of Labor Statistics (2021), we select low-income and high-income occupations that are common enough to be needed in all communities and provide variation in wages or salaries. Finally, for one third of our sample of MLOs, we add mention of expecting a child.
Experimental Design Details
Not available
Randomization Method
Randomization done in office by a computer
Randomization Unit
Mortgage loan originator is the unit of randomization
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
Our planned number of clusters is 7,096 MLOs.
Sample size: planned number of observations
There are two emails sent per MLO. Therefore, our goal is 14,192 observations (mortgage inquiries).
Sample size (or number of clusters) by treatment arms
Treatment and control groups were comprised of 7,096 MLOs.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
MDE: 3.5-percentage point difference in response rates.
IRB

Institutional Review Boards (IRBs)

IRB Name
Tulane University Social/Behavioral Research Institutional Review Board
IRB Approval Date
2022-08-15
IRB Approval Number
2022-1184-TU
Analysis Plan

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information