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<p>I examine whether mortgage brokers influence loan affordability and borrower financial outcomes. Broker-originated mortgages tend to be larger and less affordable, and are followed by greater declines in credit scores and higher delinquency rates. These effects are concentrated among less financially sophisticated borrowers. An instrumental variables strategy exploiting geographic variation in pre-crisis bank presence supports a causal interpretation. The findings suggest that broker incentives can lead to weaker financial outcomes for borrowers.</p>

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Mortgage Brokers and Borrower Outcomes

  • 期刊论文

  • 发表日期：

    2026年4月13日

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  • Dimuthu Ratnadiwakara

摘要

I examine whether mortgage brokers influence loan affordability and borrower financial outcomes. Broker-originated mortgages tend to be larger and less affordable, and are followed by greater declines in credit scores and higher delinquency rates. These effects are concentrated among less financially sophisticated borrowers. An instrumental variables strategy exploiting geographic variation in pre-crisis bank presence supports a causal interpretation. The findings suggest that broker incentives can lead to weaker financial outcomes for borrowers.