Mortgage Approval Case Study 2

Problem Statement

A major financial services company wishes to better understand its mortgage approval process. In particular, the company is interested in learning about the effects of good versus fair credit history, the size of the mortgage (less than $500,000 versus greater than $500,000), and the region of the United States (western versus eastern) on the time it takes to get a mortgage approved. The database of mortgages approved in the last year is accessed, and a random sample of five approved mortgages is chosen for each of the eight combinations of the three variables. The data are shown in the table.

Mortgage Approval Time Study

Credit History Mortgage Size Region Approval Times (days) Approval Times (days) Approval Times (days) Approval Times (days) Approval Times (days)

Good <$500,000 Western 59 50 64 62 47

Fair <$500,000 Western 81 58 69 65 74

Good >$500,000 Western 38 52 58 60 65

Fair >$500,000 Western 146 159 133 143 129

Good <$500,000 Eastern 28 26 38 41 21

Fair <$500,000 Eastern 42 53 40 50 64

Good >$500,000 Eastern 49 31 49 42 38

Fair >$500,000 Eastern 106 115 126 118 138