Blacks more likely to be rejected for home mortgage loans than whites

Jet, August 25, 1997

Blacks were more likely to be turned down than Whites for home mortgage loans last year, according to a government study.

An explanation of 9,300 banks and lending firms showed about 48.8 percent of Black applicants were rejected for loans, while only 24.1 percent of White applicants were rejected for loans.

The annual report, released by the Federal Financial Institutions Examination Council, a group of banking regulators, was based on required disclosures by banks of the race and income of home-mortgage applicants.

The report also showed that while conventional mortgage loans--those without government guarantees or insurance--decreased by 1.5 percent for Blacks, they increased 6.7 percent for Whites.

Overall, rejection rates for all groups have risen along with Americans' debt levels and bankruptcy rates, the report said. But, the disparity in rejection rates among race and ethnic groups has remained wide.