Mortgage applicants face ongoing discrimination

Serious racial inequities continue to plague home loan applicants.

When Black people apply for mortgages, they are more likely to be denied than their White counterparts. Home Mortgage Disclosure Act (HMDA) data clearly shows higher rates of denials of loans to Black applicants, when compared to White applicants.[1]

A person with a South Florida government speculated that, well, this different treatment comes from Black people just generally coming to the table less qualified. Two points on that.

First, even if it were that simple, “coming to the table less qualified” is itself often the result of discrimination. Compared to White borrowers, Black and Hispanic borrowers face different treatment to begin with in many of the baseline considerations for loan approval, including credit,[2] rental history/opportunities,[3] employment,[4] and banking.[5]

And second, it’s still actually not as simple as the best applicants get the best treatment. Even when applying for loans with the same creditworthiness (when the main considerations are equal between the applicants), Black and Hispanic borrowers are still frequently given less favorable lending options and conditions, compared to White borrowers.[6] That is (based on repeated findings), one White person and one Black person coming to the mortgage application process with the SAME application are still likely to be subject to different loan decisions, just because of race.[7]

The first step is admitting there’s a problem. The next steps are understanding this issue, reporting this discrimination when it arises, legal action and enforcement otherwise against the discriminating entities, and policy changes to end (and counteract) centuries-long practices of systematic and systemic disenfranchisement and exclusion.