So the two scholars analyzed whether such differences are due to banks' ability to select less risky borrowers (information effect), or due to bank regulatory structures that make them more cautious lenders (institution effect).
Their findings suggest that moving forward, mortgage policies and programs targeting low-income borrowers may benefit from considering the extent to which they (or impede) localized bank-borrower relationships, as well as other alternatives that facilitate the collection and use of soft information and prepurchase screening, as a complement to more traditional regulatory mechanisms.
Isn't this interesting? What do you have to say about this!?!?