If you’re a black American trying to finance the purchase of your first home or your forever home, or just trying to refinance your current home, you're less likely to get approved for a mortgage, LendingTree found in a new study.

Using 2019 federal mortgage data, LendingTree’s study looked at the spread in mortgage denial rates between black Americans and the overall population in each of the nation’s 50 largest metropolitan areas.

For mortgage applications for a home purchase, LendingTree found that black Americans are more likely to be denied a home loan than the overall population of home buyers, with lenders denying black applicants 12.64% of the time—6.49 percentage points higher than the overall denial rate of 6.15%.

Tendayi Kapfidze, chief economist for LendingTree, said in an email today that he was not surprised by the study’s findings.

“Unfortunately ... there is a long history of discrimination in mortgage lending,” he said. “There needs to be a response both from government and industry. For black borrowers, speaking to multiple lenders will increase their odds of finding a lender that will work with them. Utilizing digital tools and online lenders can often reduce the implicit bias that occurs when borrowers meet a loan officer in person."

Out of the 50 largest areas studied, Milwaukee, St. Louis and Cleveland had the largest spread between the denial rate for black applicants and the overall denial rate on purchase loans, with an average spread of 10.96 percentage points. Sacramento, Calif., Seattle and San Diego had the smallest average spread at 3.45 percentage points.

African Americans face similar odds in applying for a mortgage refinance loan. On average, lenders deny Black refinance borrowers a mortgage 30.22% of the time. LendingTree said that’s 13.15 percentage points higher than the overall denial rate of 17.07%.

The largest spread for the overall denial rate for mortgage refinance loans was greatest in Phoenix, Philadelphia and Denver, with an average spread of 21.93 percentage points, LendingTree found. Dallas, Minneapolis and Miami had the smallest spread at 4.44 percentage points.

LendingTree also found that racial disparities in denial rates for purchase and refinance loans could be even more extreme on the county level. In some counties, even those with relatively high black populations, the denial rate for black purchase and refinance borrowers alike could be as high as 100%, the report found. That can sometimes result in a spread between the overall denial rate and the denial rate for lack homeowners and buyers being over 90%, Lending Tree said.

Even in counties where black Americans are in the majority, the denial rate is disproportionately high for both black mortgage applicants, the study found. Black home buyers in 83 of the 95 counties with black majority majorities that LendingTree examined faced a higher denial rate than the overall population. Denial rates for black refinance borrowers were equal to or lower than those of the overall population in only nine counties.

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