Race Appears to Be a Factor in Baltimore Mortgage Denials

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A study released today from the National Community Reinvestment Coalition found that race was more important than income when it came to mortgage denials in Baltimore in 2013.

Here’s what the study revealed:

+ In 2013, loans were made to 797 out of Baltimore’s nearly 400,000 black residents and 2,000 out of the city’s 175,000 white residents.

+ Banks approved 72 percent of mortgage applications in lower-income neighborhoods that were 81 to 90 percent white. They approved just 59 percent of applications in lower-income neighborhoods where at least 80 percent of the residents where non-white.

+ Higher-income borrowers had an 82-percent success rate in neighborhoods that were at least 90 percent white. Higher-income borrowers had a 64-percent success rate in neighborhoods that were at least 80 percent non-white.

+ Lower-income borrowers in surrounding counties had “had roughly the same approval rates as higher-income borrowers in Baltimore.”

The study makes a strong case that the racial makeup of a neighborhood is more important than income when it comes to mortgages in Baltimore, which would mean that Baltimore’s non-white residents face de facto housing discrimination and greater obstacles to building equity than white residents.

The New York Times notes that there are pieces of information about borrowers — credit score, for instance — that the government does not yet collect, limiting the ability of researchers to pit race against all other factors and to verify banks’ stated reasons for mortgage denial. That will change, but not until 2018.


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