USA Today: Discrimination Persists in Mortgage Lending and Housing

“The public also has a right to know the identity of the banks that discriminate. Why are they being protected?”

-Alexander Roberts, executive director, Community Housing Innovations

Discrimination persists in mortgage lending and housing in the Lower Hudson Valley, potentially making it harder for certain groups of people to find homes here, according to two reports issued this week.

The reports were released by Westchester Residential Opportunities, a nonprofit with offices in White Plains and Mount Vernon, and were based on investigations funded by grants from the U.S. Department of Housing and Urban Development.

“We’re very concerned that there’s very limited affordable and accessible housing in Westchester,” said Marlene Zarfes, WRO’s fair-housing director. “By doing this study, what we’re seeing is (that) discrimination still exists among many protected classes including race, familial status — which means people with children — disability and source of income.”

For the mortgage-lending study, which covered the years 2013 and 2014, the nonprofit conducted 50 tests, sending trained testers to branches of major mortgage lenders in 31 predominantly white communities in Westchester, as well as Ramapo, Clarkstown and Orangetown in Rockland County.

The nonprofit used different testing methodology to evaluate lenders’ performance depending on prospective borrowers’ status, including disability, family status, military service, national origin and race. To determine potential impacts of race, for example, two sets of testers — one minority and the other white — were sent to the same lender to assess whether they were treated differently.

Forty-six percent of those tests showed “disparate treatment on the basis of race, national origin, disability or familial status,” the report reads. Among the 23 based on race, 13 were found to be unfair. Examples of unequal practices included lenders’ offering borrowers different loan terms and conditions, different interest rates or fees, and different policies.

“As the results of our testing program indicate, discrimination may continue to impede housing choices and opportunities in the Lower Hudson Valley today, 47 years after the passage of the federal Fair Housing Act,” the report concluded.

The names of the lenders were not disclosed in the report, which angered one local advocate.

“The WRO report is evidence of pernicious discrimination in some of the most ‘liberal’ communities which are in the county of Westchester but in the state of denial,” said Alexander Roberts, executive director of Community Housing Innovations in White Plains. “The public also has a right to know the identity of the banks that discriminate. Why are they being protected?”

Geoffrey Anderson, WRO’s executive director, said although the names weren’t disclosed, the lenders were made aware of — and were receptive to — the findings.

Marianne Collins, executive director of the New York Mortgage Bankers Association, questioned the findings, saying that lending officers, particularly those who work with major banks, have been intensively trained on various regulations, including the Equal Credit Opportunity Act, the Fair Housing Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act. Moreover, lending officers have no incentive to discriminate, she said.

“They work on commission, so they want to make every loan they can possibly make. There would be no reason to turn someone down that was deserving of a loan,” Collins said.

Collins questioned the testers’ qualifications, saying that the four-hour training provided by WRO can’t be enough to teach them about how to assess the performance of lending officers in a complex process.

Zarfes, WRO’s fair housing director, said the testing method the group used was the industry standard and has been approved by the U.S. Supreme Court.

For the housing study, the nonprofit conducted 234 tests in the Lower Hudson Valley between 2012 and 2015, sending testers who posed as potential home buyers or apartment renters. A total of 73 cases, or about 31 percent, were found to be unfair, according to the report.

Discrimination was found on the basis of race, source of income — either employment or government programs such as disability and Section 8  — and family status.

Willie Trotman, president of the Spring Valley branch of the National Association for the Advancement of Colored People, said he was not surprised.

“Cliche goes, ‘Green allows you to live anywhere,’ meaning if you’ve got the money, you can live anywhere. But you realize that’s not the case,” he said. “Even in 2016, that’s not the case.”