The use of digital footprints in the US mortgage market

We study the rise of digital footprint (DF) users in the U.S. residential mortgage market. The proportion of lenders that use a borrower's DF has witnessed remarkable growth from 6% in 2013 to 34% in 2018 in a short span - according to our analysis. We show that the use of DFs can significantly reduce a lender's overall risk and that the use of DFs can result in considerable societal benefits, by reducing the overall discriminatory forces. In sum, we provide evidence that the informational advantage associated with using a borrower's DF far outweighs that of existing traditional lending methods.

Automated summary

We study the growth of digital footprint users in the U.S. residential mortgage market. According to our analysis, the proportion of lenders using a borrower's digital footprint has increased significantly from 6% in 2013 to 34% in 2018 in a short period of time. Our research shows that the use of digital footprints can effectively reduce a lender's overall risk and contribute to considerable societal benefits by reducing discriminatory forces. Overall, we provide evidence that the informational advantage gained from using a borrower's digital footprint far exceeds that of traditional lending methods.