Aggressive Advocates For Your Rights

Major study finds racist redlining in mortgage lending nationwide

It has been 50 years since the Fair Housing Act prohibited race discrimination in mortgage lending. Unfortunately, a major new study has found that these harmful and illegal practices continue today, despite an affirmative obligation on lenders to actively solicit business from every segment of their communities.

In the 30s, federal Home Owners' Loan Corporation surveyors drew lines around some neighborhoods and colored them red to signify they were "hazardous" for lenders. The reason? The neighborhoods were home to African-Americans and Jewish immigrants from Europe. This practice was called "redlining."

Redlining is outlawed now, but Reveal, a project of The Center for Investigative Reporting, found that people of color still face significant barriers to home loans regardless of their objective qualifications.

There is too much detailed information to cover in a blog post. We recommend you read the entire Associated Press article detailing the findings, which the AP independently reviewed and confirmed, or the entire report by Reveal.

Here are some highlights. Based on 31 million Home Mortgage Disclosure Act records, Reveal found a pattern of apparently racially-motivated mortgage denials in 61 metropolitan areas all across the nation.

People of color were denied conventional mortgages at a higher rate than whites, even when income, neighborhood and loan amount were taken into account. The rate differed by area, but the disparities occurred nationwide.

The areas where lending to people of color was most resisted were in locations across the South, such as Mobile, Gainesville, Greenville, North Carolina and -- for Latinos -- Iowa City. However, there were major disparities in a host of northern cities, including Philadelphia.

In Philadelphia, African-Americans were 2.7 times as likely to be denied a conventional mortgage than whites, even taking unequal factors into account.

"I had a fair amount of savings and still had so much trouble just left and right," said a 33-year-old African-American woman who tried to buy a home in Malcolm X Park. She was rejected twice by lenders.

African-Americans were denied at significantly higher rates than whites in 48 cities; Latinos in 25; Asians in nine; and Native Americans in three. All four groups were denied substantially more often than whites in Washington, D.C.

These disparities help explain the homeownership gap between whites and people of color. That gap is larger now than it was during the Jim Crow era.

Nevertheless, the nation's top bank regulator, the comptroller of currency, found 99 percent of banks performed their Community Reinvestment Act duties adequately. Under Obama, the Justice Department only sued nine banks for unjustified disparities in lending, and fewer enforcement actions are expected under Trump.

If you believe you have faced lending discrimination, we recommend contacting a civil rights attorney.

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