Loan Disparity in Baltimore


The National Community Reinvestment Coalition (NCRC) recently released a report, Home Mortgage and Small Lending in Baltimore and Surrounding Areas, which reveals troubling truths for lending practices in the city. The study’s executive summary articulates, “[This report] details lenders’ abandonment of neighborhoods in Baltimore based upon the race of members of those neighborhoods and the preferences of lenders for white borrowers and majority white neighborhoods.”

The NCRC found that majority white neighborhoods benefit from generous lending activity while majority black neighborhoods are consistently denied loans.

The report enumerates the following major findings:

  • In Baltimore City, race matters most in mortgage lending. Consistently across models, the most statistically significant factor in predicting mortgage lending is race. Mortgage lending is greater in neighborhoods with larger white than African American populations.
  • There are tremendous disparities in home lending for African American and white residents of Baltimore City. The disparity ratio of loans to percentage of population is 210 percent for whites and 37 percent for African Americans.
  • It’s much harder to get a mortgage loan in the poorer neighborhoods. In Baltimore City, 70 percent of census tracts are low-to-moderate income (LMI), yet it is very difficult for borrowers of any income to be approved there, especially if they are African American.
  • Mortgage lending flows to wealthier areas. An LMI applicant is 30 percent more likely to be approved for a mortgage loan in a middle- or upper-income area of Baltimore County than in an LMI neighborhood of Baltimore City.

These lending habits in Baltimore, coupled with redlining settlements taking place around the country, leave a lot to be desired for the mortgage lending industry. As people are denied loans and prevented from purchasing homes, they are being systematically impeded from improving their social stature and lives.

To read the NCRC report in full, please click here.

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