Twin Cities Mortgage Hunters Take Care

February 17th, 2009 by Sara

A recent Twin Cities study found that the color of your skin still affects what mortgage rate you will pay or how likely you are to be denied a mortgage, regardless of your financial circumstances. In a Star Tribune story about it, the president of the Minnesota Mortgage Association said not enough data about credit scores and other application details was included in the report to draw this conclusion.

But the most interesting fact was that high-income black, Hispanic and Asian applicants have a higher denial rate for purchases and refinances than even low-income whites.

I think the numbers from the report speak for themselves:

For instance, very high-income blacks, Asians, and Hispanics, making more than $157,000 a year, were much more likely to be denied mortgage loans than whites making less than $39,250. The denial disparities were greatest for black borrowers. The denial rate for blacks with incomes above $157,000 was 25%, while it was just 11% for whites making $39,250.

Similarly, even very high income people of color were much more likely to receive subprime loans. High and very-high income black and Hispanic borrowers were more likely to receive subprime loans than in any white income group.”