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RELATED STORY: Stubborn Homeownership Barriers Remain for Non-White Borrowers
Banks have a simple answer when faced with high denial rates for Hispanic mortgage applicants: You don’t know the whole story.
So many factors go into consideration for a mortgage, refinance or home equity loan that bank officials say it’s hard to find two like-minded candidates, a white and a Hispanic, to prove discrimination.
If information such as debt to income ratio, collateral, credit history, credit ratings, and cash for down payment were available, more meaningful comparisons would be possible. Consumer advocates and fair housing coalitions across the country have advocated for this data to be included, without personally identifying information, in reports required by the Home Mortgage Disclosure Act. Credit institutions lobbied hard against such disclosure, citing confidentiality concerns, and prevailed.
Nonetheless, St. Mary’s Bank officials provided the Granite State News Collaborative with some of this information for Hispanic/Latino borrower applications it denied in 2020. Of the 25 denied applications, eight were withdrawn. or approved but not accepted. The others failed for these reasons: debt to income ratio (3); guarantee (5); incomplete file (4); credit history (4); insufficient cash (1).
“From our perspective, there’s no bias on the part of lenders here or underwriters,” said Jan Raymond, executive vice president and chief loan officer at St. Mary’s. “The important thing to keep in mind is that we would have to do a lot more research on each of them to really determine what went on inside them. We haven’t looked at anything in detail and there’s so much more Is it a question of ethnicity? I would say absolutely not.
TD Bank spokesman Matthew Doherty highlighted the bank’s programs and policies designed specifically to benefit diverse communities.
“TD Bank is committed to diversity, equity and inclusion by providing access to all of its financial products and services. At the time of the request, we are required to assess the customer’s financial information in accordance with banking regulations and credit standards,” he wrote in an email.
“It is important to note that TD Bank does not refuse mortgages or any other product or service based on race, ethnic origin or membership in another protected category. Additionally, we continually develop and expand programs and policies designed to positively impact the financial health of our customers and the diverse communities we serve.
Paul A. Turner, senior vice president of consumer lending communications at Wells Fargo, also highlighted new initiatives that demonstrate a commitment to greater diversity in lending.
He cited the bank’s Dream.Plan.Home.SM mortgage which was launched in February 2021. It is designed for consumers whose income is at or below 80% of the median income of the region where the property.
The bank also “made significant progress on two diverse lending commitments,” he said, working with the National Association of Hispanic Real Estate Professionals, the National Association of Realtors and the NAACP, among others. As a result, he said, through 2020, “these efforts have helped 188,460 Hispanic families and 72,758 African American families become homeowners with more than $67 billion in mortgages since the Commitments launched.” in 2015 and 2017″.
To download any of the data featured in these articles, visit our Data Library www.collaborativenh.org/data-library These articles are shared by The Granite State News Collaborative partners as part of our Race and Equity Project. For more information, visit collaborativenh.org.