James Brown once sung about the world being a “Man’s World”, but if you’re looking to get a mortgage loan, you need to be a white man to actually get approved. A recent study by the Woodstock Institute shows that white men are at an advantage when it comes to securing mortgage loans. The study shows that African-American women, and even those households with female headed joint applications are less likely to receive mortgage loans:
The fact sheet, “Unequal Opportunity: Disparate Mortgage Origination Patterns for Women in the Chicago Area,” previews a longer research report to be released later this year. An examination of 2010 data on first lien single-family home purchase and refinance mortgage originations and denials in the Chicago six county region by race and gender finds that:
• Female-headed joint applications are much less likely to be originated than are male-headed joint applications. Controlling for loan-to-income ratio, which is one measure of the affordability of the loan, female-headed joint home purchase mortgage applications in the Chicago six county region are 24 percent less likely to have loans originated than are male-headed joint applications.
o Among subregions in the Chicago six county area, the largest disparities between female- and male-headed joint purchase application originations are in Northwest Cook (female-headed joint applications are 40 percent less likely to be originated), Kane County (40 percent less likely), and Will County (34 percent less likely).
o Female-headed joint applications are not significantly less likely to be originated than male-headed ones in South and Southwest Cook, DuPage County, Lake County, and McHenry County.
• The disparity between female- and male-headed joint home purchase applications holds true across all racial categories, controlling for loan-to-income ratio, and is most pronounced for African American women. African American female-headed joint home purchase applications are 34 percent less likely to have loans originated than African American male-headed joint purchase applications. White female-headed joint purchase applications are 22 percent less likely to have loans originated than are white male-headed joint purchase applications, while the disparities between likelihood of origination for female- and male-headed joint purchase applications are 19 percent for Latino applicants and 12 percent for Asian applicants.
• The racial and gender disparities among joint applications are even more extreme for refinance loans. Controlling for loan-to-income ratio, female-headed joint refinance applications are 39 percent less likely to have loans originated than are male-headed joint refinance applications.
Of course we know this type of discrimination in the mortgage industry isn’t new. Last year GFI Mortgage Bankers agreed to pay more than $3.5 million to settle allegations by federal prosecutors that it charged higher interest rates and fees on mortgages to nonwhite borrowers than to whites with similar financial backgrounds. It’s just sad to see that the more things supposedly change, the more they stay the same.