Lending

Homeownership is the primary means for most Americans to build wealth, and lack of access to homeownership greatly impacts long-term financial needs, retirement, and generational wealth. Unfortunately, many people may experience barriers to their access of mortgage products. The FHCCI has been active since 2015 in promoting equal access to credit for all, making significant investment to build and expand homeownership opportunities.

Types of housing discrimination in mortgage lending may include:

  • A bank closing its bank branches only in neighborhoods of color or not conducting outreach in neighborhoods of color while doing outreach in white neighborhoods.
  • A mortgage lender refusing to approve a loan unless a borrower on parental leave returned to work.
  • A company targeting persons of color or neighborhoods of color with predatory lending products.
  • A mortgage lender requiring intrusive and unnecessary medical records to prove disability based income or subsidies.
  • An appraiser adding references into their appraisal documents about the neighborhood demographics or past racial or ethnic history to justify an appraisal outcome.

FHCCI Resources:

Redlining Maps (Home Owners’ Loan Corporation):

As part of the New Deal, in 1933, a government agency was created called the Home Owner’s Loan Corporation (HOLC). This agency was charged with helping expand homeownership opportunities. As part of their efforts, the HOLC created maps for many major U.S. cities to determine where the new government backed mortgage loans should, or should not, be made. Some of the factors that determined neighborhood ratings for a map, was the income of the residents as well as their race, ethnicity, and religion. These maps are commonly known today as “redlining maps” because of the use of “redlines” around the lowest graded neighborhoods. Their use helped to create the substantial homeownership and appraisal gap we see today based on race and ethnicity. Although the use of these maps was banned in 1968 with the passage of the federal Fair Housing Act, their impact is still evident today. For us in Indiana, several of our cities had redlining maps created that were used during the post-World War II homeownership boom:

Government Guidance & Resources:

Cases of Interest:

Reports of Interest:

Other Mortgage Lending Issues:

Other Lending Laws of Interest:

If you feel that you may have been discriminated against in a lending situation due to your race, color, national origin, religion, gender, disability, or familial status, please contact the FHCCI. If you need assistance not related to discrimination regarding a loan modification, refinancing, or otherwise, please consider contacting a HUD certified housing counseling agency.

In order to understand how a city’s neighborhoods may be so different, it is important to learn about historic policies which may be still impacting these neighborhoods today. One such policy action this FHCCI video focuses on is a practice called “redlining.”

Visit the FHCCI Data Portal to review Home Mortgage Disclosure Act (HMDA) data for lenders in your county.

In this FHCCI video, learn about racial covenants and the historic actions of the real estate industry that impacted the ability to become a homeowner due to race, color, national origin, and religion.

In this FHCCI video, learn about predatory lending practices and products which may violate fair housing laws and are commonly referred to as forms of “reverse redlining.”

Housing discrimination in the mortgage lending market can come in a variety of forms. This FHCCI video reviews eight kinds of discrimination that the FHCCI most often encounters in mortgage lending.

When the Fair Housing Act was passed in 1968, it made it unlawful to discriminate in housing transactions due to protected classes. Unfortunately, what the Fair Housing Act couldn’t do was fix the systemic housing discrimination that had already been done to communities across the country. In this video, learn about the activities of the FHCCI and area organizations to try to combat historic exclusion.