Lending Fairness

How Mortgage Lending Works — and Where It Fails

Normal: You apply for a mortgage. The lender evaluates your income, credit, debt, and the property. If you qualify, you get the loan. The Home Mortgage Disclosure Act (HMDA) requires lenders to report every application — including approvals, denials, and the applicant's race and ethnicity. This data is public.

Broken: Denial rates are not equal. Nationally, Black applicants are denied at roughly twice the rate of white applicants for conventional home loans. Hispanic applicants face similar disparities. Even controlling for income, the gap persists. This isn't always intentional discrimination — it's often structural: credit scoring models that penalize communities with less generational wealth, appraisal systems that undervalue homes in Black neighborhoods, and lender practices that steer borrowers of color toward higher-cost products.

Fix: If you were denied a mortgage and believe discrimination played a role, file a complaint with HUD at 1-800-669-9777 or the CFPB at consumerfinance.gov/complaint. You have the right to know why you were denied — the lender must provide a written adverse action notice. Compare denial rates by race in your county using this tool. If the disparities are large, your community can share that data with local officials and elected representatives.