Public Service in the Private Sector: Private Loan Originator Participation in a Public Mortgage Program

In the United States, housing policies focused on assisting low-income families towards homeownership have resulted in the creation of publicly subsidized affordable mortgage programs. Private lenders and their employees (loan originators) are often the key point of contact to connect low-income borrowers to these public programs. But why would loan originators offer borrowers public loan programs, particularly when such programs provide no additional (and sometimes reduced) direct financial compensation to the private lenders and potentially increased workloads? One possible rationale, and the one investigated here, is that loan originators may be diversely motivated towards public service and the advancement of the public interest. Though Alhough a great deal of research focuses on public service motivation among public sector employees, few studies investigate the tendency toward public service motivation and action in the private sector. Here we draw from surveys of private lenders to test a model and hypotheses about how private lenders’ associations, perceptions and values are related to voluntary participation in a government program. Our analysis highlights the importance of public associations, perceptions of government and public values in explaining the behavior of private sector employees. Our findings contribute to the literature on public service and public values and our understanding of how private organizations access government programs to advance the public good