Bluelining in Red Hot Fire Zones: Fintech and Traditional Mortgage Lending in California’s Wildfire Risk Zones

Recent research evaluates variations in mortgage lending outcomes across lender types in climate risk-exposed areas, but little is known about the relationship between mortgage lending and wildfires. This study evaluates mortgage lending in California to determine whether fintech and traditional lending outcomes differ across areas with varying wildfire risks. The results suggest traditional lenders approve lower rates of loans and assign higher interest rates for homes in high wildfire risk neighborhoods than do fintech lenders. These findings highlight the importance of understanding how mortgage market dynamics relate to wildfire risk in the rapidly growing fintech market.