Discrimination and mortgage lending

In response to your Friday article “Racial gaps seen in mortgage acceptance”:

In the story, Zillow senior economist Aaron Terrazas points out that the gap in mortgage acceptance among whites, blacks, Asians and Hispanics regarding home-loan approval numbers points “to both progress and stubborn inequities in the American housing market.” He also pointed out that black applicants “are still more than twice as likely as whites to be denied, a visible legacy of historical discriminatory policies.” But the article never discusses why blacks are rejected more than all other racial groups.

I do not believe that banks and mortgage companies discriminate based on race. They judge the applicant on creditworthiness and ability to pay back the loan. A lending institution loans money for mortgages based on your credit score, which is calculated by looking at your payment history, credit utilization (which evaluates whether you pay your bills on time and length of credit history. Other criteria used in evaluating the applicant include the amount of income, any current loans and your down payment percentage in relationship to the property you want to purchase.

When applying for a loan, the applicant must state his/her race, ethnicity, gender and age. That may seem odd, but the federal government demands it by law. Such laws were enacted to identify any discriminatory lending patterns.

To show if a group is actually discriminated against, a study should be done to evaluate the creditworthiness of the applicant. We shouldn’t draw conclusions from some statistical number based on race.