New Economy Project Finds Applicants of Color are Denied More Home Loans Than Similar White Applicants, City Limits Reports

Posted on March 8, 2018

Mortgage Denials Higher in NYC’s Neighborhoods of Color

Originally Published in City Limits on March 7, 2018
Written by Jarrett Murphy

Banks in New York are denying more housing loans in neighborhoods where people of color dominate, and are turning down black applicants who seek mortgages and refinancing at a higher rate than similar white applicants, an advocacy group reported this week. The New Economy Project looked at denial rates for conventional mortgages—those without Federal Housing Authority or Veterans Administration insurance, and the bulk of home loans in New York City—in 2016 and found that “three out of four neighborhoods where lenders denied more than half of applications received were communities of color.” The higher the share of non-whites in an area, the organization reported, the higher the denial rate. Even when “controlling for income, loan size and other factors,” Black applicants were twice as likely as Whites and Latinos 1.5 times as likely as Whites to be denied for home loans, with similar disparities evident in the numbers for refinance applications. In a statement, the New York Bankers Association told City Limits: “It is against the law to discriminate on the basis of race in lending decisions. Unlike other lenders, banks are also subject to the Community Reinvestment Act (CRA), which ensures adherence to this standard with stringent exams.” New Economy Project insists the federal government is not the only player that can help force fairer lending. “New York has tremendous leverage over the big banks that dominate the field. For starters, New York City and State both have billions of public dollars on deposit with the big banks – not to mention our public pension fund investments and myriad contracts,” the report reads. “As an obvious step, New York should divest from financial institutions that are actively harming New Yorkers and New York neighborhoods.”

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