Mortgage discrimination

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Mortgage discrimination or mortgage lending discrimination is the practice of banks, governments or other lending institutions denying loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion. One of the most notable instances of wide-spread mortgage discrimination occurred in United States inner city neighborhoods from the 1930s up until the late 1970s.

African Americans and other minorities found it nearly impossible to secure mortgages for property located in redlined zones.^[1] The systematic denial of loans was a major contributor to the urban decay that plagued many American cities during this time period.

Minorities who tried to buy homes continued to face discrimination from lending institutions into the late 1990s. The disparities are not simply due to differences in creditworthiness.^[2] With other factors held constant, rejection rates for Black and Hispanic applicants was about 1.6 times that for Whites in 1995^[3].

Fairness in lending was greatly improved by the Home Mortgage Disclosure Act, passed in 1975. It requires banks to disclose their lending practices in the communities they serve.