Many individuals are aware that discrimination against prospective and existing tenants based on race, color, religion, sex, familial status, national origin, disabilities, sexual orientation, or gender identity is banned. But did you know that discrimination based on these variables is also banned during the house purchasing and loan processes?
The Case Study Of Lending Discrimination:
Because of the small number of people in racial and ethnic minority groups in New Hampshire, it’s difficult to acquire a clear picture of why racial and ethnic discrepancies occur in lending.
The Federal Reserve Bank of Boston makes data from the Home Mortgage Disclosure Act public. The data were examined as part of the NHLA’s 2020 Analysis of Impediments to Fair Housing Choice in New Hampshire, which takes place every five years.
These findings revealed that Black and Latino mortgage applicants have much higher refusal rates than white applicants and that their rates are greater than the national average.
Despite the lack of control for other factors such as income, the findings are consistent with a 2015 study that found that in 2013, Latino home mortgage loan applicants were more likely than non-Latino applicants to be denied a mortgage, even after accounting for gender, income, type of loan sought, race, and geography.
Discrimination in lending is a problem that exists all around the country. One of the issues that emerged in the aftermath of the Great Recession and the mortgage crisis was discriminatory lending practices. The case of United States v. JPMorgan ChaseBank is an example.
The federal government filed a case in 2017 alleging that JPMorgan Chase Bank engaged in a pattern of race and national origin discrimination in lending.
From 2006 to 2009, Black and Latino’s borrowers paid higher rates and fees on wholesale house mortgage loans than White borrowers in identical situations. The Fair Housing Act and the Equal Credit Opportunity Act were both broken. Chase agreed to create a $53 million settlement fund to reimburse claimants as part of the settlement.
Discrimination in mortgage lending is a complicated topic. Most people only apply for a mortgage once or twice in their lives, making the process new to them.
Borrowers must sign hundreds of pages of documentation during the mortgage lending and closing process. Housing inequities have existed for a long time, and the intricacy of the process makes people exposed to further discrepancies.
Homebuyer counseling and education programs are one of the most successful ways to educate new homeowners about the lending options that are most beneficial to them.
The NH Housing Finance Authority, NeighborWorks Southern NH, CATCH Neighborhood Housing, and Laconia Area Community Land Trust are among the organizations that provide counseling and education in New Hampshire.
Another strategy to solve this long-standing issue is to help communities realize how institutional racism and prejudice have influenced housing for decades.
Dr. Richard Rothstein, author of “The Color of Law: A Forgotten History of How Our Government Segregated America,” spoke at a virtual seminar hosted by NHHFA and St. Anselm College’s Center for Ethics in Business and Governance in 2020 on historic segregation patterns fostered by US government policy. This is one of many seminars given in recent years to raise awareness about housing and lending prejudice.
Monitoring of lending trends and practices, as well as outreach to minority and low-income house buyers, should continue.
The Fair Housing Project assists clients in matters of housing discrimination. Please contact the Fair Housing Project at 800-921-1115 if you suspect you have been a victim of housing discrimination during the house buying process.