“Are mortgage lenders and brokers a bunch of bigots? According to Hillary Clinton, speaking at a town hall meeting, the answer is Yes!” The Association of Mortgage Professionals (NAMB), wrote in its weekly News From Namb. “When a young Hispanic complained about how many hoops he had to jump through, Hillary, without any proof, claimed it was because he is Hispanic.
“The truth is everyone jumps through similar hoops these days, courtesy of Dodd/Frank which Hillary has sworn to defend and even expand.”
During the town hall meeting, a young man asked Clinton what her administration would do to ease fears of another housing crash.
“For many … achieving home ownership is synonymous to achieving the American dream. Yet many of our families were hit particularly hard during the great recession and housing bust,” the man said. “What would a Clinton Administration do to ease the fears of homeownership among our community?”
Clinton skirted the question and instead accused the lending industry of being racially biased.
“You know, you are three times more likely to be able to get a mortgage if you are a white applicant than if you’re Black or Hispanic – even if you have the same credentials and you’re presenting it to the people who are looking at it.”
It’s an answer that will likely upset a number of industry players, but is she entirely off base? After all, there have been a number of studies conducted by various groups that draw attention to lending practices and racial bias.
A study published in late 2015 by consumer advocacy group the National Community Reinvestment Coalition revealed what it called “deep racial disparities” in mortgage lending in Baltimore.
“While many Americans take the ability to obtain a mortgage for granted, majority African American neighborhoods in Baltimore City are largely closed off from access to responsible credit and economic opportunity,” NCRC President and CEP John Taylor said in a release. “These neighborhoods are lending deserts. This is part of a sad legacy of racial discrimination and segregation that continues to afflict the city.”
The report found race matters most in Baltimore City, with lenders more willing to lend in predominantly white neighborhoods.
It also found that it is very difficult for borrowers in low-to-moderate income neighborhoods – regardless of personal income. A low-to-moderate income borrower is more likely to receive a loan in wealthier neighborhoods, according to the study.
In another case, a Florida Atlantic University study found a discrepancy in mortgage rates paid by African-American and white homebuyers.
“There was a reason to believe that they should be treated the same because other studies suggest that (African-American) borrowers tend to have lower default risk,” Ping Cheng, a FAU finance professor, and the leader of the study, told the South Florida Business Journal last August. “If they get a loan, that means the (African-American) borrowers… generally, maybe comparably, have lower risk profiles and they should be the same in terms of interest rate.”
The study found that on average African-American borrowers pay about 29 basis points more per loan than the average Caucasian borrower.
Still, one industry player is arguing Clinton is out of line. Check out his response below.
Does Hilary Clinton think mortgage the mortgage industry is full of bigots? One association argues she does.