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Racial disparities in mortgage lending remain, study finds

Updated August 4, 2020 - 2:47 pm

People of color in Nevada and across the U.S. are more likely to be rejected for a home loan than white borrowers, says a new report, showing the long-standing disparity hasn’t gone away.

Home-listing site Zillow announced Tuesday it analyzed the most recent data — from 2017 — available through the federal Home Mortgage Disclosure Act. Nationwide, Black mortgage applicants had a 16 percent denial rate, nearly double the 9 percent rejection rate among white applicants, Zillow found.

In Nevada, American Indian or Alaska Native mortgage applicants had the highest denial rate, 14 percent, followed by Hispanics at 12 percent, Asians and Blacks at 11 percent and whites at 8 percent, the company reported.

According to Zillow, mortgage lenders rely heavily on an applicant’s credit history, but credit reporting and scores “have a long history of disadvantaging people of color, who are more likely to be victims of predatory lending or not have a credit history at all.”

“At a time when racism is at the front of many Americans’ minds, the disparity in mortgage rate denials is yet another reminder that the housing market — and country — have not done enough to address inequities and heal the scars from an unjust past,” Zillow economist Joshua Clark said in a news release.

Racial differences in home-loan rejections aren’t a new issue. In 1990, Black mortgage applicants’ rejection rates were about 2½ times larger than those of white households with similar income, according to a 2003 paper by University of Southern California and Syracuse University researchers.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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