Report: Women Better than Men at Paying Mortgages

Even though female-only borrowers pay more for their mortgages and have higher denial rates, they have a better record of paying their mortgages than their male counterparts, said a report from the Urban Institute.

The report (http://www.urban.org/research/publication/women-are-better-men-paying-their-mortgages/view/full_report) said weaker credit characteristics do not accurately predict how well women pay their mortgages. Holding all credit characteristics constant, female-only borrowers default less than their male counterparts, a finding that holds true for white, African-American and Hispanic women.

“The bottom line: single women with mortgages are doing a better job of paying their mortgages than their credit characteristics predict,” the report said.

The report said because the higher price they pay for their mortgages is based on their credit characteristics when they take out the loan, single women borrowers are paying too much for their mortgages. This inequality, it said, does not translate into a significant amount that single women overpay for their mortgages: less than $150 per female-only borrower per loan.

“The important issue, however, is that the dimensions we rely on to assess credit risk today do not adequately capture all the differences,” the report said. “This omission has real consequences. Women generally are denied for mortgages more often despite their superior payment performance. Given that more than one-third of single-women borrowers are minorities and almost half of them live in low-income communities, we need to develop more robust and accurate measures of risk to ensure that we aren’t denying mortgages to women who are fully able to make good on their payments.”

Moreover, the report said, female-only borrowers have a higher denial rate, “suggesting we need to develop more robust and accurate measures of risk to ensure that we aren’t denying mortgages to women who are fully able to make good on their payments,” the report said. “This is particularly important because more than one-third of female-only borrowers are minorities and almost half of them live in low-income communities.”

The report was authored by Laurie Goodman, co-director of the Urban Institute’s Finance Policy Center; Senior Research Assistant Jun Zhu; and Research Assistant Bing Bae.