In Chicago, Women More Likely To Be Denied Mortgages Than Men

by James Bellandi

Women of nearly every income level are impacted by a gap in mortgage approval rates

Women were 14.5 percent less likely to have purchase loans originated than men from 2011 to 2013, and were 17.4 percent less likely to have refinance loans originated during that period according to a study published this month by the Woodstock Institute.

In addition, female-headed purchase loan applications with a co-applicant were 28.3 percent less likely to originate than male-headed purchase loan applications with a co-applicant, and female-headed refinance loan applications were 27.2 less likely to originate than male-headed refinancing loan applications.

The study used the Home Mortgage Disclosure Act’s (HMDA) data for origination rates on loans in six counties in Chicago. The divide existed for both conventional and government-backed loans.

This gap existed across all income levels with one exception – low-income women without a co-applicant. Low-income women, who were defined as having an income level of less than 80 percent of the Area Median Income, were 5.6 percent more likely to originate than men for purchase loans, and 4 percent more likely to originate for refinance loans. One possibility for the exception is that low-income female applicants were more likely to to have more stable work histories and better credit ratings.

What Chicagoland County Rejects the Most Female Mortgage Applicants?

The study also looked at reasons for loan rejections, and found that men were more likely to be rejected for failing to complete the application or not having sufficient collateral, while women were more likely to be rejected more due to credit history and their debt-to-income ratio.

The disparities were more pronounced by county as well. Will County saw the biggest disparity between female and male mortgages originated, while Cook and Lake counties saw the least.

Banks were also examined. Bank of America, PNC, US Bank and Wells Fargo were more likely to deny female purchase loans, while Fifth Third Bank, Provident Funding Group and US Bank were more likely to deny female refinance loans.

By contrast, Guaranteed Rate, Key Mortgage Services and Wintrust all had low difference rates between male and female purchase loans originated for both single and joint applications. Bank of America, 1st Advantage Mortgage, Chicago Mortgage Solutions and Quicken Loans all saw low difference rates for single and joint refinance originations.

The Woodstock Institute suggested lenders and regulators investigate potentially discriminatory practices, enhance the Home Mortgage Disclosure Act and expand policies to combat the wage gap, in which women earn, on average, 77 cents to every dollar a man earns.

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