Mortgage denials tied to race

by Justin da Rosa18 Nov 2015
A study by consumer advocacy group the National Community Reinvestment Coalition reveals “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 neighbourhoods.
It also found that it is very difficult for borrowers in low-to-moderate income neighbourhoods – regardless of personal income. A low-to-moderate income borrower is more likely to receive a loan in wealthier neighbourhoods, according to the study.

“In Baltimore City, 70% of census tracts are low-to-moderate income yet it is very difficult for borrowers of any income to be approved there, especially if they are African American,” the NCRC said in the study.

The disparity ratio of loans to percentage of population is 210% for white borrowers and 37% for African American borrowers, according to the study.

This lending bias is negatively impacting the growth of these neighbourhoods, according to the NCRC. 

“Until our financial institutions make a full and genuine commitment that creditworthy borrowers, regardless of their skin color, will be able to access responsible credit, the economies in these neighborhoods will continue to deteriorate, and we will continue to have the circumstances you see in Baltimore, Ferguson, and elsewhere,” Taylor said.


  • by Rob | 11/18/2015 12:06:31 PM

    I wonder if they compared credit, income, assets, and the conditions of the home, or did they just compare race?

  • by The Truth | 11/18/2015 1:03:28 PM

    Good luck finding an objective person (who bases criteria on anything other than being black) in a group called 'National Community Reinvestment Coalition'! Are the American people (finally) getting tired of the RACISM card being played any time there is money to be had??

  • by NoSpinJustFacts | 11/18/2015 1:11:42 PM

    I do not believe they have utilized the full information required for a true mortgage application including, income, assets, credit scores, and credit histories. I have never seen a report that sourced this information when making the conclusions provided in this article. Note they have not provided their sources so the public can review the data used.

    This has been a historical problem when HMDA reports were used to make any valid claims on who and who was not receiving mortgage approvals. Without the full data used for making mortgage approval/denials and the pricing associated with each, the claims are not factual rather they are manipulated data outputs. Anyone who has ever done research knows that numbers certainly do lie when not fully disclosed on the method used to obtain results.


Should CFPB have more supervision over credit agencies?