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“Homeownership is one of the primary ways that people build wealth,” said Spencer Cowan, Vice President of Research at Woodstock Institute. “It is concerning that women have a harder time getting mortgages than men, even when the mortgages are similarly affordable. Ultimately, this disparity limits women’s opportunities to build wealth and achieve economic security.”
The report, “Her Longer Road Home: Disparities in Mortgage Lending to Women in the Chicago Region,” analyzed Home Mortgage Disclosure Act (HMDA) data from 2011 to 2013 by income level of the borrower, mortgage type, originating lender, and the location of the property within the Chicago region. Using this data, the report found:
- Mortgage applications from most women and women with co-applicants are less likely to be originated than mortgage applications from men and men with co-applicants, even controlling for loan-to-income ratio.
- The disparities between the origination rates for men and women persist across both conventional and government-backed mortgages.
- Mortgage applications from low-income women were the only ones more likely to be originated than mortgage applications from men of similar income.
- Bank of America, PNC, US Bank, and Wells Fargo had above-average gender disparities across all categories for purchase loans, while Fifth Third Bank, Provident Funding Group, and US Bank had above-average gender disparities across all categories for refinance loans.
- Disparities between male and female origination rates were highest in Will County for both purchase and refinance mortgages, while disparities between male-headed and female-headed co-applicant origination rates were highest in Will County for purchase mortgages and in DuPage County for refinance mortgages.
- There were significant disparities in the reasons for denial between female applicants and male applicants.
“These findings raise troubling questions about whether lenders’ business practices might be raising barriers to mortgage credit for women,” said Cowan. “Mortgage lenders should carefully examine their lending practices and processes to ensure that they do not contribute to the gender disparities in loan origination rates, and policymakers should investigate these practices.”
Based on these findings, Woodstock Institute recommends:
- Mortgage lenders should examine their mortgage lending processes to detect and correct potentially discriminatory practices.
- Regulators should further investigate possible gender discrimination in mortgage lending practices, particularly for lenders with above-average disparities.
- The Consumer Financial Protection Bureau must expeditiously finalize enhancements to the Home Mortgage Disclosure Act.
- Policies to reduce the gender wage gap should be expanded and enforced.