Black Mississippians are more often denied loans

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African Americans are more likely to be denied a mortgage in Mississippi than in any other state.

African-American home loan applicants are being denied double that of white Mississippians, according to the latest available federal data.

Each year, the federal government collects data under the Home Mortgage Disclosure Act of 1975.

The Clarion Ledger reviewed the data, which shows African Americans in Mississippi have been – and continue to be – denied home loans at a much higher rate than in other states.

Since the transition from renting a home to buying a home is an important step in building wealth and entering the middle or upper class, the Clarion Ledger review did not includes loans for refinancing or expanding a home. The review focused on prefabricated and single-family residences, not multi-family dwellings.

Data from 2017 shows marked divisions between African Americans and white Mississippians.

Compared to the rest of the country, all Mississippi borrowers have significantly lower incomes. They are much more likely to apply for loans for prefabricated housing, such as mobile homes, and are much more likely to be denied a loan.

Credit score information is not included in the data.

Here is what we found:

  • Nationally, the average denial rate for a home loan application was around 12%. Mississippi had the highest rate – over 22% – of home loan refusals.
  • In Mississippi, over 35 percent of mortgage applications submitted by African Americans in Mississippi were turned down. This is compared to 16% of home loans turned down to white applicants. It is also the highest rate of refusal of loans to African Americans in the country.
  • In Mississippi, African Americans have applied for 10,564 home loans and have been refused 3,711 times. White Mississippians applied for 27,589 home loans and were turned down 4,549 times.
  • People applying for home loans in Mississippi had the lowest average income – $ 66,016 – of any state. New Yorkers had the highest price tag, at $ 129,540.
  • African-American applicants for a home loan in Mississippi had an average income of $ 48,474. White applicants had an average income of $ 71,661.
  • Mississippi had the highest rate of loan applications for prefabricated housing – 27%. Nationally, the average was 7 percent.
  • Mississippi has 82 counties. African Americans have been denied home loans at a rate of 40% or more in 68 of those counties. Whites have been denied home loans at a rate of 40 percent or more in just one county – Jefferson County, at 41 percent.
  • Even in counties where rejection rates for African-American applicants were relatively low, they were much more likely to be refused than whites.. Madison County, for example, had the second lowest refusal rate for African Americans looking for a loan – 23%. However, this is more than three times higher than the refusal rate for whites – 7%.
  • There were 41,182 home loan applications in Mississippi in 2017. More than half – 24,831 – resulted in a loan.

According to the Consumer Financial Protection Bureau, it is important to publish annual data on mortgage lending because “it sheds light on lending models that may be discriminatory.”

SEE DATA: Check the data for yourself by clicking here.

Congress passed the Fair Housing Act in 1968, making it illegal to deny someone a home loan on the basis of race, color, religion, sex, disability, family status, or national origin.

Many other states have stricter laws to ensure potential buyers are not discriminated against.

According to LawAtlas, 43 states have penalties for violating fair housing standards. The site says Mississippi is the only state in the country that does not prohibit discrimination in housing transactions.

Update: A sentence in this story has been corrected to show that Mississippi does not have penalties for violating fair housing standards.

Have you been unfairly refused a home loan? Contact Giacomo “Jack” Bologna at 601-961-7282 or [email protected] Follow him on Twitter @gbolognaCL.

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