All for $375,000.
Prequalifying for the mortgage was a breeze.
The monthly mortgage payment was less than theyd paid for rent in Los Angeles for years.
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The couple had spent $6,000 in fees and depositsall nonrefundable.
Her co-workers were contractors, too, and they had mortgages.
Crystal Maries co-workers are White.
She and Eskias are Black.
Lenders were 80 percent more likely to reject Black applicants than similar White applicants.
These are national rates.
The first two are now public in the Home Mortgage Disclosure Act data.
In fact, high-earning Black applicants withlessdebt were rejected more often than high-earning White applicants who havemoredebt.
Your work shows thats not true.
They didnt want the government to even collect the data, let alone make it public.
They cited the risk of cyberattack, which could reveal borrowers private information.
Government regulators do have access to credit scores.
In other places, the gap was even larger.
Who makes these loan decisions?
Officially, lending officers at each institution.
In reality, software, most of it mandated by a pair of quasi-governmental agencies.
If they dont approve a loan, the lenders are on their own if the borrower skips out.
This algorithm was developed from data from the 1990s and is more than 15 years old.
Unlike more recent models, it penalizes people for past medical debt even if its since been paid.
This is how racism gets embedded into institutions and policies and practices with absolutely no animus at all.
Potentially fairer credit models have existed for years.
Almost a third of them would be Black or Latino.
Neither of the companies would answer questions from The Markup about why they still require Classic FICO.
Well-deserving consumers are being left behind.
Color-blind approvals?
As a result, residents are more likely to use these predatory services to borrow money.
Not even home valuations are free from controversy.
He declined to elaborate on what the review entails or how often its done.
Lenders ultimate mortgage decisions are public, however.
Borrowers names are not reported to the government and addresses are not in the public data.
Loan officers say the softwares decisions are mysterious even to them.
That lack of transparency in the technology is very concerning.
How those programs work is even more of a mystery; they are also proprietary.
When we examined the decisions by individual lenders, many denied people of color more than White applicants.
Among them: the mortgage companies owned by nations three largest home builders.
Agencies need to do a better job of ferreting out discrimination and taking serious action once they find it.
Steins group has lobbied for the law to be reformed.
Lenders who violate fair lending rules can be punished with fines in the millions of dollars.
Banks already have laws that punish people who commit fraud, he said.
you could be imprisoned forI hope you have your seatbelt on30 years.
And some fair lending advocates have begun to ask whether the value system in mortgage lending should be tweaked.
Crystal Marie said whatever effect race may have had on her denial, it wasnt overt.
Its just something that we always understand might be a possibility.
The lender, loanDepot, denied race had anything to do with the decision.
She said her family has always had a fraught relationship with money.
This article wasoriginally published on The Markupby Emmanuel Martinez and Lauren Kirchner was republished under theCreative Commons Attribution-NonCommercial-NoDerivativeslicense.
