Racial Disparities in Lending and Foreclosure Trends

first_img Demand Propels Home Prices Upward 2 days ago Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, Market Studies, News Borrowers Clever.com HMDA Lender Discrimination Lenders Loan mortgage 2019-07-04 Radhika Ojha July 4, 2019 2,483 Views Tagged with: Borrowers Clever.com HMDA Lender Discrimination Lenders Loan mortgage Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas. Previous: The Value of Rent Payment Reporting Next: Parts of a Whole in Default Servicing About Author: Radhika Ojhacenter_img Subscribe Related Articles Sign up for DS News Daily Data Provider Black Knight to Acquire Top of Mind 2 days ago Home / Daily Dose / Racial Disparities in Lending and Foreclosure Trends Racial Disparities in Lending and Foreclosure Trends Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post African-Americans are twice as likely to be denied a mortgage when controlling for income, according to a Clever.com study.The study, which analyzed Home Mortgage Disclosure Act (HMDA) data from the Federal Financial Institution’s Examination Council (FFIEC) about applicant and borrower characteristics, revealed that applicant data points were limiting and that HMDA’s data set is missing important variables like why applicants were denied.In fact, it found that 52% of black applicants had no reason listed for their mortgage being denied.Amongst its key findings, the study said that when controlling for income, the disparity between white and black mortgage approval rates was most pronounced in the South. Eighty-nine percent of white applicants are approved in Southern states, compared to 76% of black applicants, it indicated.The states where black applicants are least likely to get approved included Kansas, South Carolina, Mississippi, Louisiana, Arkansas, Delaware, and Alabama. In South Carolina, the study said that 49% of black applicants were denied applications compared to 8% of white applicants, not controlling for income.While it found the least racial disparity in mortgage lending in the West, the study said that “the difference between approval rates is still statistically significant, indicating racial discrimination in the mortgage industry is a nationwide issue.”It found four exceptions to this rule. In Montana, Idaho, Hawaii, and Vermont the number of mortgage loan denials were higher for white borrowers than Black. Additionally, in these states, the discrepancy between black and white approval rates is less than 7%.Looking at borrowers by race, it indicated that “mortgage applicants are predominantly white.” Out of the sample of 1.7 million applicants analyzed by Clever.com, more than 1.4 million mortgage applicants were white, compared to 80,442 African Americans, 93,762 Asian Americans, 29,293 American Indians, and 15,645 Native Hawaiians or Pacific Islanders.The study also found that African-Americans and Hispanics were more likely to be at risk of foreclosures. This, because African-Americans (105%) and Hispanics (78%) were more likely to use high-cost mortgages to purchase a home. The Best Markets For Residential Property Investors 2 days ago The Best Markets For Residential Property Investors 2 days agolast_img