Study Finds Racial Disparity in Pittsburgh-Area Mortgage Lending
African-Americans seeking a mortgage in Pennsylvania’s Allegheny County face higher rates of denial from lenders, according to a new study released by the Pittsburgh Community Reinvestment Group.
The study, which details 2013 data, found that only 3.4 percent of the more than 12,000 mortgage loans issued in Allegheny County that year went to African-Americans. The study found that 41 percent of mortgage applications filed by African-Americans were denied, compared to 20 percent for whites. Fifty-eight percent of all denied mortgage applications from African-Americans were rejected due to credit history, compared to 38 percent for whites.
Rachel Rue, the author of the study, told WESA-FM that African-Americans were in a Catch-22 situation when it came to credit history-based rejections.
“They come to the bank and the answer is, ‘You don’t really have a credit score or not one that we can rely on,’” Rue said. “One of the reasons credit history can come up so often is that there’s an absence of a sufficient borrowing record in the past. To borrow money from a bank for a mortgage, you have to have already borrowed money in the past and paid it back. It turns out if you’re not at least borrowing some money and paying it back regularly, you’re not going to be able to move to the next level of borrowing, which you need to be able to do to buy a house.”