Credit unions most likely to have black members, one credit union turning down black mortgage applicants
CNN: Navy Federal Credit Union, the nation’s largest credit union, approved less than half of home loans for African-American mortgage applicants
Writer’s note: This post was originally published on Homegrown Tales.“
If I can’t buy a home because of Kohl’s, I’m going to be mortified,” I said to myself after I read the mortgage lender’s email.
After cc:ing my Realtor, he’d told us both that there was going to be trouble approving my loan because of my Kohl’s credit card. My Realtor was disgusted. She said it was not only highly unprofessional for this email to go to her and was solely my business, but she didn’t like the way the email was written.
As a first-time prospective homebuyer, I didn’t know any better. All I knew was I should’ve chilled out on swiping my card at a department store. From that one credit card, I had to reevaluate all of my top-five choices to buy a home, along with my budget. With a middle-income salary and after just getting a raise, with a 700-plus credit score, it never even crossed my mind that I would get denied. I’d always believed that I didn’t own a home voluntarily, not because anyone would dare to turn me down.
Recommended Read: “Homegrown podcast: Meet Christopher Meeks, trainer for the First Time Home Buyer Education program ~ Step 1 to homeownership: Speak the same language as your mortgage loan officer”
And I (a non-veteran) wasn’t making anywhere near the salary that Bob Otondi, another mortgage applicant, earned — more than $100,000 a year from his logistics business. According to this CNN report, his credit score (like mine) was above 700. Unlike me, he didn’t have significant debt.
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Even worse (or better, depending on how you look at it), two weeks later, with a different mortgage lender, his application was approved and the home purchase was complete. So why on Earth was he turned down for a loan in the first place?
Recommended Read: “CNN: The nation’s largest credit union rejected more than half its Black conventional mortgage applicants”
According to CNN and the most recent data available from the Consumer Financial Protection Bureau, Navy Federal Credit Union (which lends to people in the Navy, Army, Marine Corps, Air Force, Space Force, Coast Guard, veterans) approved more than 75% of white borrowers who applied for a new conventional home purchase mortgage in 2022. However, less than 50% of Black borrowers who applied for the same type of loan were approved.
Recommended Read: “The underdog of owning property: Grant qualification ~ Your mortgage company may or may not tell you about grant options”
In fact, the credit union rejected about 3,700 Black mortgage applicants last year at the same time that housing interest rates spiked. Could federal regulators not policing credit unions in regard to the Community Reinvestment Act (CRA) be to blame?
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