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More Than Half Of Black Conventional Mortgage Applicants Rejected By Nation's Largest Credit Union

A #CNN analysis revealed that Navy Federal Credit Union, the largest U.S. credit union, shows a significant racial disparity in mortgage approvals. In 2022, over 75% of White applicants received approval for conventional home purchase #mortgages, compared to less than 50% of Black applicants. This nearly 29-percentage-point gap is the largest among the top 50 mortgage lenders.

The disparity persists even among applicants with similar incomes and debt-to-income ratios. For instance, Navy Federal approved more White applicants earning under $62,000 than Black applicants earning over $140,000. Statistical analysis indicated that Black applicants were more than twice as likely to be denied as White applicants with comparable financial profiles.

Navy Federal, founded in 1933 to serve Navy employees and now open to all armed forces and Department of Defense personnel, veterans, and their relatives, boasts about 13 million members and over $165 billion in assets. Despite its claim of commitment to fair lending practices, it has faced criticism for these racial disparities.

Bob Otondi, a Black business owner in #Texas, experienced this disparity firsthand when his mortgage application was denied by Navy Federal but quickly approved by another lender. Despite Navy Federal's defense of its practices, the credit union has not released additional data, including borrowers' credit scores.

Navy Federal's lending trends reflect a broader issue in the U.S., where the gap in homeownership rates between White and Black Americans is larger today than in the pre-Civil Rights era. This disparity is a significant factor in wealth differences between these racial groups. Experts and advocates for fair housing have raised concerns about these trends, calling for closer scrutiny and potential changes in lending practices to address these racial disparities.

Link: CNN


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