“In February, Natee Amornsiripanitch, an economist at the Federal Reserve Bank of Philadelphia, published an analysis of more than 9 million mortgage applications collected through the Home Mortgage Disclosure Act from 2018 to 2020. He found that rejection rates rose steadily with age, particularly accelerating for applicants over 70.” The New York Times, April 8, 2023
The reason mortgage rejection statistic rates for older Americans are important to explore is because of the dichotomy between what the law says, specifically in the Equal Credit Opportunity Act (ECOA), and what actually happens when lenders look at an application. The ECOA prohibits discrimination in lending on the usual array of factors like race, color, religion, national origin, sex or marital status, or age. In fact, the Consumer Financial Protection Bureau (CFPB) has fleshed out this statutory requirement in a rule explaining what constitutes discrimination in lending and what doesn’t.
On the other hand, lenders still have a legitimate need to determine an applicant’s credit-worthiness. So how are these two, competing goals reconciled? Not easily, it seems. And according to this new, extensive research on the increasing rate of mortgage denials for seniors, not necessarily in favor of those the law is trying to protect.
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