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Studies Find Race Bias in Mortgage Process

March 12, 2000|From Inman News Features

Everyone who works hard and pays bills on time should be able to get a mortgage loan, right?

Two recently released studies indicate some form of prejudice still exists in the mortgage industry, and it's keeping some people away from their homeownership dreams.

Black and Latino home loan applicants continue to be rejected more frequently than whites, according to separate studies released by the Assn. of Community for Reform Now, or ACORN, and the Urban Institute.

The Urban Institute study found that, overall, minorities were less likely to receive information about loan products, received less time and information from loan officers, and were quoted higher interest rates on mortgages in most of the cities where tests were conducted.

Findings were based in part on paired testers (one white and one minority) with similar credit histories, incomes and financial histories, and the same type of mortgage needs.

The ACORN report found that in 1998, blacks were denied mortgages 217% as often as whites, up from 206% in 1995 and 209% in 1997.

Latino applicants were rejected 183% as often as whites for conventional mortgages in 1998, up from 169% in 1995 and 181% in 1997.

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