TY - JOUR AU - Mayer,Christopher J. AU - Pence,Karen TI - Subprime Mortgages: What, Where, and to Whom? JF - National Bureau of Economic Research Working Paper Series VL - No. 14083 PY - 2008 Y2 - June 2008 UR - http://www.nber.org/papers/w14083 L1 - http://www.nber.org/papers/w14083.pdf N1 - Author contact info: Christopher J. Mayer Columbia Business School 3022 Broadway, Uris Hall #808 New York, NY 10025 Tel: 212/854-4221 Fax: 212/854-8776 E-Mail: cm310@columbia.edu Karen Pence Household and Real Estate Finance Federal Reserve Board of Governors MS 93 Washington, DC 20551 E-Mail: karen.pence@frb.gov AB - We explore the types of data used to characterize risky subprime lending and consider the geographic dispersion of subprime lending. First, we describe the strengths and weaknesses of three different datasets on subprime mortgages using information from LoanPerformance, HUD, and HMDA. These datasets embody different definitions of subprime mortgages. We show that estimates of the number of subprime originations are somewhat sensitive to which types of mortgages are categorized as subprime. Second, we describe what parts of the country and what sorts of neighborhoods had more subprime originations in 2005, and how these patterns differed for purchase and refinance mortgages. Subprime originations appear to be heavily concentrated in fast-growing parts of the country with considerable new construction, such as Florida, California, Nevada, and the Washington DC area. These locations saw house prices rise at faster-than-average rates relative to their own history and relative to the rest of the country. However, this link between construction, house prices, and subprime lending is not universal, as other markets with high house price growth such as the Northeast did not see especially high rates of subprime usage. Subprime loans were also heavily concentrated in zip codes with more residents in the moderate credit score category and more black and Hispanic residents. Areas with lower income and higher unemployment had more subprime lending, but these associations are smaller in magnitude. ER -