The nation’s largest credit union rejected more than half its Black conventional mortgage applicants
The nation’s largest credit union rejected more than half its Black conventional mortgage applicants
A major credit union serving military members and veterans rejected more than half of its Black conventional mortgage applicants
A major credit union serving military members and veterans rejected more than half of its Black conventional mortgage applicants
A deeper statistical analysis performed by CNN found that Black applicants to Navy Federal were more than twice as likely to be denied as White applicants even when more than a dozen different variables – including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.
This is the important bit, so someone can't argue differences in loan applications.
154Not going to lie, my first thought was to wonder whether and how they controlled for this.
But I took a step back and reminded myself that REDLINING HAPPENED. Well into the modern day. It was only outlawed in 1968, and there's evidence that banks continued to do it through the 70s.
It's absolutely no surprise that there are still disparities, and I would be further unsurprised to find out that the deciding factor was zip code.
33so someone can’t argue differences in loan applications.
This is the internet, my friend. Someone absolutely can still argue that in face of the facts.
24This is the Internet. You can post comprehensive, overwhelming, irrefutable proof and people will still argue.
Did the article say anything about their payment history? That looks like the only variable they didn't mention.
9I noticed the article indicated that the analysis didn't include credit score, available cash deposit, and relationship history with the lender. Honestly, it is usually credit score and cash on hand that gets you approved to receive a loan, debt to income ratio to determine maximum loan amount, and property value to pass underwriting requirements.
CNN's response is basically, we don't have the credit scores because it isn't in the public data, and sort of glosses over it from there.
Now, I'm all for rooting out implicit and systematic bias, especially with systems that have profound effects on life trajectory, and I think credit scores are particularly prone to disadvantage minorities, but I feel like CNN really could have done better here. I know they asked the bank for credit score data, but the bank can't release that information to a third party like that. I would have liked to see CNN being in some more expertise on the subject.
I'm contrast both NPR and NYT have done much more thorough investigative journalism on these topics. NPR in particular did a great podcast on how black home owners were routinely having their homes appraised for markedly less than white peers, and NYT covered discrepancies in underwriting outcomes even when credit history was the same.
I think CNN saw the easy article against this particular bank and took it to fill column space.
15
Pearson said that CNN’s analysis “does not accurately reflect our practices” because it did not account for “major criteria required by any financial institution to approve a mortgage loan.” Those factors included “credit score, available cash deposits and relationship history with lender,” he said.
This is the important bit. They didn't even account for the most basic of approval criteria. CNN didn't even deny it. Just said that the banks refused to provide that information (because, duh, it's private).
There are federal lending regulations that require strict numbers-based criteria. There are no personal opinions involved in the underwriting process.
Ignoring basic criteria because "well they wouldn't give it to us!" is just dishonest and more of your typical race-baiting "journalism".
7Good catch, I missed that because that site has ad cancer.
2
TBH, this was my first thought when I read the headline. Surely they can't be so bald-faced racist as to just deny someone because they're black, they'd be caught easily. So I assumed it must be something like lower credit scores or some other confounding factor, which, to be clear, is still the result of racism. But like a deeper, more systemic racism. That it's apparently not feels more concerning to me, like they just didn't think it would be a problem if they got caught.
3That's exactly why I read the article!
1
There's more variables than just the ones listed that are considered when giving out loans.
For example, this article doesn't mention anything about credit score or collection accounts being the same. Credit score is THE biggest factor, this article is pure speculation.
2True, but they didn't list all 12, so credit score could be part of it.
1
It's disheartening to hear about the challenges faced by Black applicants in accessing conventional mortgages, especially when striving for homeownership is a fundamental part of the American dream. While this issue underscores systemic disparities within the lending industry, it also highlights the importance of exploring alternative financial solutions.
In situations where traditional lending avenues may pose obstacles, options like a 25 dollar cash advance can offer immediate relief for minor expenses or unforeseen financial hurdles. While it may not address the larger issue of mortgage access directly, it can provide temporary assistance in navigating financial challenges.
However, it's crucial to recognize that systemic inequalities require comprehensive solutions that address underlying issues of discrimination and inequity in lending practices. Efforts to promote fair lending practices, improve financial literacy, and expand access to homeownership opportunities for marginalized communities are essential steps toward achieving economic justice and equality.
1"Notably, Navy Federal approved a slightly higher percentage of applications from White borrowers making less than $62,000 a year than it did of Black borrowers making $140,000 or more."
I don't know man. Like, I agree that data is missing, but the data they did pull is very damning. Like how is there a higher approval % of white applicants making less than half the yearly salary of black applicants?
1And I just saw another thing about black people being like 30% of homeless population. I bet many were veterans.
0A much more interesting headline would compare black to non-blacks on this measure
0Top comment when you posted.
A deeper statistical analysis performed by CNN found that Black applicants to Navy Federal were more than twice as likely to be denied as White applicants even when more than a dozen different variables – including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.
2Black people, not blacks.
0