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Banks find loopholes to deny blacks and Latinos home loans at twice the rate of whites


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While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

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There are correlations between population groups and FICO scores and correlation often, but not always, suggests causation. Here's a pretty detailed study on the FICO score disparate impact issue:

 

 

https://www.federalreserve.gov/pubs/feds/2010/201058/201058pap.pdf

 

Abstract: The widespread use of credit scoring in the underwriting and pricing of mortgage and

consumer credit has raised concerns that the use of these scores may unfairly disadvantage minority

populations. A specific concern has been that the independent variables that comprise these models

may have a disparate impact on these demographic groups. By “disparate impact” we mean that a

variable’s predictive power might arise not from its ability to predict future performance within any

demographic group, but rather from acting as a surrogate for group membership. Using a unique

source of data that combines a nationally representative sample of credit bureau records with

demographic information from the Social Security Administration and a demographic information

company, we examine the extent to which credit history scores may have such a disparate impact. Our

examination yields no evidence of disparate impact by race (or ethnicity) or gender. However, we do

find evidence of limited disparate impact by age, in which the use of variables related to an individual’s

credit history appear to lower the credit scores of older individuals and increase them for the young.

 

 

FICO's comment on the study:

http://www.fico.com/en/blogs/risk-compliance/do-credit-scores-have-a-disparate-impact-on-racial-minorities/

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Next up will be the articles with millennials whining because the process fails to take into account the manner in which they kept mommy and daddy's basement while they lived at home until the age of 30.

 

Numbnuts in New Jersey that had to be evicted will probably whine and snivel that it was so unfair that he now has a judgment because he refused to move from mommy and daddy's home and forced them to file the eviction proceedings.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

 

 

Did you happen to notice who wrote the article though.. I serious doubt that women was looking for "race" excuses..

While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

I agree..

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There are correlations between population groups and FICO scores and correlation often, but not always, suggests causation. Here's a pretty detailed study on the FICO score disparate impact issue:

 

 

https://www.federalreserve.gov/pubs/feds/2010/201058/201058pap.pdf

 

Abstract: The widespread use of credit scoring in the underwriting and pricing of mortgage and

consumer credit has raised concerns that the use of these scores may unfairly disadvantage minority

populations. A specific concern has been that the independent variables that comprise these models

may have a disparate impact on these demographic groups. By “disparate impact” we mean that a

variable’s predictive power might arise not from its ability to predict future performance within any

demographic group, but rather from acting as a surrogate for group membership. Using a unique

source of data that combines a nationally representative sample of credit bureau records with

demographic information from the Social Security Administration and a demographic information

company, we examine the extent to which credit history scores may have such a disparate impact. Our

examination yields no evidence of disparate impact by race (or ethnicity) or gender. However, we do

find evidence of limited disparate impact by age, in which the use of variables related to an individual’s

credit history appear to lower the credit scores of older individuals and increase them for the young.

 

 

FICO's comment on the study:

http://www.fico.com/en/blogs/risk-compliance/do-credit-scores-have-a-disparate-impact-on-racial-minorities/

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

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While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

Your wish is my command but be prepared for some "inconvenient truths".

 

First off, one needs to know how the lending system works before they make such statements. Almost all underwriting approval and denials of residential Real Estate loans is done with AU, automated underwriting. Fannie Mae, Freddie Mac,and FHA all use these systems. Hopefully you do not think that computers are discriminating.

 

Additionally, numbers do not lie. The average FICO score of a Black home buyer is 677, the average FICO for Hispanic home buyer is 701, and the average is 734 for Whites. So, Blacks average home buyer FICO is 57 points lower than Whites and Hispanics are 33 points lower.

 

Further, 21.3% of black home buyers have a FICO of less than 620, Hispanics are at 11.2%, and Whites are at 5.4%.

 

The numbers clearly show why the approval numbers are so low for Blacks and Hispanics. 21.3% and 11.2% home buyers with a FICO under 620 is clearly telling as to why the approval numbers are so low for these groups.

 

The author chose to omit these zingers because it does not fit with their intentionally misleading agenda. Please do your research before being tricked or manipulated into the racism trap.

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^

If there was a study of taking 100 random potential black and Latino mortgage applicants vs 100 random white mortgage potential mortgage appliacants in the greater D.C. Metro area with the 200 applicants being presented to 5 different mortgage lenders without any info except DTI and Fico scores the results would closely mimic the article with all 5. Race and names were not disclosed. As stated above lenders are interested in making solid loans using financial metrics for their decisions.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

 

 

Did you happen to notice who wrote the article though.. I serious doubt that women was looking for "race" excuses..

While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

I agree..

 

Discussions about fake news like this article go far beyond the apologists who author such drivel.

 

The reality IS that articles like this are about inventing rage over issues that simply are not borne out by the actual data that the 'investigative journalists' do not want to find. If you have ten applicants, eight of whom are of some sort of 'minority' status, and the two majority applicants are approved while seven of the eight minorities are denied, it does NOT carry an automatic presumption that any manner of bias due to status was present. But those who want to push the fake news of racial animus will assert that it was simply based upon those approval/denial numbers.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

 

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

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While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

Your wish is my command but be prepared for some "inconvenient truths".

 

First off, one needs to know how the lending system works before they make such statements. Almost all underwriting approval and denials of residential Real Estate loans is done with AU, automated underwriting. Fannie Mae, Freddie Mac,and FHA all use these systems. Hopefully you do not think that computers are discriminating.

 

Additionally, numbers do not lie. The average FICO score of a Black home buyer is 677, the average FICO for Hispanic home buyer is 701, and the average is 734 for Whites. So, Blacks average home buyer FICO is 57 points lower than Whites and Hispanics are 33 points lower.

 

Further, 21.3% of black home buyers have a FICO of less than 620, Hispanics are at 11.2%, and Whites are at 5.4%.

 

The numbers clearly show why the approval numbers are so low for Blacks and Hispanics. 21.3% and 11.2% home buyers with a FICO under 620 is clearly telling as to why the approval numbers are so low for these groups.

 

The author chose to omit these zingers because it does not fit with their intentionally misleading agenda. Please do your research before being tricked or manipulated into the racism trap.

 

 

Twirls hair, tilts head at a flattering angle and bats eyelashes at all the big scary statistics and number thingies. Gosh, let me dust off my thinking cap and see what I can come up with.

 

Did you notice that the African American woman referenced in the article was not declined for FICO, DTI or Down Payment when you based your arguement on FICO, DTI and Down Payment? Did you notice that she did not receive a denial via auto generated computer letter/email when you noted the neutrality of algorthim based decisions?

 

There are alot of inconvenient truth's to go around. Here's a handy one: Noone is above confirmation bias.

 

I look forward to reading more Credit Board discussions defending approval practices this adamantly in future threads.

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No she was denied as she didn’t have consistent income. To count a second job you need to be there 2 years I believe. This article does not say how long after getting that job she reapplied. But if it was soon the income would not count, period. This is standard UW and does affect DTI.

 

 

As for back door numbers those are not for mortgages. Let’s not confuse products here.

Edited by tiggerlgh
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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

 

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

 

1. The computer automated decision process is what is being deferred to in this thread as the foundation of neutrality. As I have been told in this thread "Numbers don't lie" so if you were unqualified before the phone call then it stands to reason that short of a typo there's no algorithm related reason to make the "truth teller" numbers work.

 

2. Stalemate. There's nothing in my statement that the discretion by an executive in that scenario is not an indicator of bias. Only the executive in the scenario can cofirm and he or she is not talking and even if the no brainer incentive is self preservation.

 

3. Of course the use of discretion opens itself to room for bias. Many have chosen to ignore the posts of Marv Bear and a few others because they acknowledges the existence of racism in lending but I'm not one of them.

 

4. Repeating what I said in the other post, the applicant used as an example in the article was not initially denied for FICO, DTI or Down Payment. People are so used to their own confirmation bias that they can't, won't or don't see it when the situation does not fit their expectation. Do "you" really believe that mortgage companies are flooded with applications from minimum wage earning minorities believing they are going to get approved with a 627 FICO score, $5 down payment and $100K debt? Yes, I am sure that there are many unqualified borrowers of all races.

 

The point of interest that this article sparked in me is whether there is a racial bias with qualified borrowers? It is not an inappropriate or unimportant questions.

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While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

Your wish is my command but be prepared for some "inconvenient truths".

 

First off, one needs to know how the lending system works before they make such statements. Almost all underwriting approval and denials of residential Real Estate loans is done with AU, automated underwriting. Fannie Mae, Freddie Mac,and FHA all use these systems. Hopefully you do not think that computers are discriminating.

 

Additionally, numbers do not lie. The average FICO score of a Black home buyer is 677, the average FICO for Hispanic home buyer is 701, and the average is 734 for Whites. So, Blacks average home buyer FICO is 57 points lower than Whites and Hispanics are 33 points lower.

 

Further, 21.3% of black home buyers have a FICO of less than 620, Hispanics are at 11.2%, and Whites are at 5.4%.

 

The numbers clearly show why the approval numbers are so low for Blacks and Hispanics. 21.3% and 11.2% home buyers with a FICO under 620 is clearly telling as to why the approval numbers are so low for these groups.

 

The author chose to omit these zingers because it does not fit with their intentionally misleading agenda. Please do your research before being tricked or manipulated into the racism trap.

 

 

Twirls hair, tilts head at a flattering angle and bats eyelashes at all the big scary statistics and number thingies. Gosh, let me dust off my thinking cap and see what I can come up with.

 

Did you notice that the African American woman referenced in the article was not declined for FICO, DTI or Down Payment when you based your arguement on FICO, DTI and Down Payment? Did you notice that she did not receive a denial via auto generated computer letter/email when you noted the neutrality of algorthim based decisions?

 

There are alot of inconvenient truth's to go around. Here's a handy one: Noone is above confirmation bias.

 

I look forward to reading more Credit Board discussions defending approval practices this adamantly in future threads.

 

Was that the one that ALSO could not be bothered to pay her utility bill after moving? You know, another one of those pesky factors that speaks directly to risk...

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

 

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

 

1. The computer automated decision process is what is being deferred to in this thread as the foundation of neutrality. As I have been told in this thread "Numbers don't lie" so if you were unqualified before the phone call then it stands to reason that short of a typo there's no algorithm related reason to make the "truth teller" numbers work.

 

2. Stalemate. There's nothing in my statement that the discretion by an executive in that scenario is not an indicator of bias. Only the executive in the scenario can cofirm and he or she is not talking and even if the no brainer incentive is self preservation.

 

3. Of course the use of discretion opens itself to room for bias. Many have chosen to ignore the posts of Marv Bear and a few others because they acknowledges the existence of racism in lending but I'm not one of them.

 

4. Repeating what I said in the other post, the applicant used as an example in the article was not initially denied for FICO, DTI or Down Payment. People are so used to their own confirmation bias that they can't, won't or don't see it when the situation does not fit their expectation. Do "you" really believe that mortgage companies are flooded with applications from minimum wage earning minorities believing they are going to get approved with a 627 FICO score, $5 down payment and $100K debt? Yes, I am sure that there are many unqualified borrowers of all races.

 

The point of interest that this article sparked in me is whether there is a racial bias with qualified borrowers? It is not an inappropriate or unimportant questions.

 

Carry your agenda elsewhere. I have no interest in further discussions that have their basis in race baiting and fake news.

 

However, as to #4...considering that I had a client who actually was one of the people 'verifying' fake jobs and incomes during the boom, yes there were people in precisely that scenario...and that $5 you reference was five bucks more than many put down on the NINJA loans that ALSO existed in that era. People of ALL races seem to believe there is an entitlement to home ownership. Just look at the incessant whining from the Left Coast.

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No she was denied as she didn’t have consistent income. To count a second job you need to be there 2 years I believe. This article does not say how long after getting that job she reapplied. But if it was soon the income would not count, period. This is standard UW and does affect DTI.

 

 

As for back door numbers those are not for mortgages. Let’s not confuse products here.

Yes. Let's not confuse products or the history of the mortgage lending industry, particularly circa 2002-2008.

 

As for the denial, the borrower would have been auto declined outright for DTI by an impartial computer if the salary of $60K was the most problematic element. As with most of the article, there is not enough information regarding the basis of the inconsistent income denial. Since neither of us can do more than speculate, I'll go the contrarian route and believe people over historically questionable institutions - on Creditboards of all places.

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While the article unwisely excludes the holy trinity of mortgage approvals: Fico Score, Down Payment and DTI, two to one odds of denial is a pretty huge coincidence particularly when the differentiating factor is race. The problem with discarding the presumption of bias under the header "not enough Information" is that people who literally have skin in the game don't have the luxury of shrugging their shoulders at a problem that has long term financial consequences for them.

 

Wanting to know that you're being treated fairly is not entitlement. The article is incomplete but it scratches the surface of something that needs further investigation.

 

Your wish is my command but be prepared for some "inconvenient truths".

 

First off, one needs to know how the lending system works before they make such statements. Almost all underwriting approval and denials of residential Real Estate loans is done with AU, automated underwriting. Fannie Mae, Freddie Mac,and FHA all use these systems. Hopefully you do not think that computers are discriminating.

 

Additionally, numbers do not lie. The average FICO score of a Black home buyer is 677, the average FICO for Hispanic home buyer is 701, and the average is 734 for Whites. So, Blacks average home buyer FICO is 57 points lower than Whites and Hispanics are 33 points lower.

 

Further, 21.3% of black home buyers have a FICO of less than 620, Hispanics are at 11.2%, and Whites are at 5.4%.

 

The numbers clearly show why the approval numbers are so low for Blacks and Hispanics. 21.3% and 11.2% home buyers with a FICO under 620 is clearly telling as to why the approval numbers are so low for these groups.

 

The author chose to omit these zingers because it does not fit with their intentionally misleading agenda. Please do your research before being tricked or manipulated into the racism trap.

 

 

Twirls hair, tilts head at a flattering angle and bats eyelashes at all the big scary statistics and number thingies. Gosh, let me dust off my thinking cap and see what I can come up with.

 

Did you notice that the African American woman referenced in the article was not declined for FICO, DTI or Down Payment when you based your arguement on FICO, DTI and Down Payment? Did you notice that she did not receive a denial via auto generated computer letter/email when you noted the neutrality of algorthim based decisions?

 

There are alot of inconvenient truth's to go around. Here's a handy one: Noone is above confirmation bias.

 

I look forward to reading more Credit Board discussions defending approval practices this adamantly in future threads.

 

Was that the one that ALSO could not be bothered to pay her utility bill after moving? You know, another one of those pesky factors that speaks directly to risk...

 

This was not a factor in the initial denial. If the impartial computer or unbiased UW didn't consider it then who am I to bring it up?

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

 

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

 

1. The computer automated decision process is what is being deferred to in this thread as the foundation of neutrality. As I have been told in this thread "Numbers don't lie" so if you were unqualified before the phone call then it stands to reason that short of a typo there's no algorithm related reason to make the "truth teller" numbers work.

 

2. Stalemate. There's nothing in my statement that the discretion by an executive in that scenario is not an indicator of bias. Only the executive in the scenario can cofirm and he or she is not talking and even if the no brainer incentive is self preservation.

 

3. Of course the use of discretion opens itself to room for bias. Many have chosen to ignore the posts of Marv Bear and a few others because they acknowledges the existence of racism in lending but I'm not one of them.

 

4. Repeating what I said in the other post, the applicant used as an example in the article was not initially denied for FICO, DTI or Down Payment. People are so used to their own confirmation bias that they can't, won't or don't see it when the situation does not fit their expectation. Do "you" really believe that mortgage companies are flooded with applications from minimum wage earning minorities believing they are going to get approved with a 627 FICO score, $5 down payment and $100K debt? Yes, I am sure that there are many unqualified borrowers of all races.

 

The point of interest that this article sparked in me is whether there is a racial bias with qualified borrowers? It is not an inappropriate or unimportant questions.

 

Carry your agenda elsewhere. I have no interest in further discussions that have their basis in race baiting and fake news.

 

However, as to #4...considering that I had a client who actually was one of the people 'verifying' fake jobs and incomes during the boom, yes there were people in precisely that scenario...and that $5 you reference was five bucks more than many put down on the NINJA loans that ALSO existed in that era. People of ALL races seem to believe there is an entitlement to home ownership. Just look at the incessant whining from the Left Coast.

 

My agenda is comfortable exactly where it is, therefore, your request much like mortgage applications to the minorities in the article is denied.

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I read the article. Where are the statistics to back up this claim?

 

There are so many regulations in place that of this article were actually accurate, we would have already read about legal actions against mortgage issuers.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

1. The computer automated decision process is what is being deferred to in this thread as the foundation of neutrality. As I have been told in this thread "Numbers don't lie" so if you were unqualified before the phone call then it stands to reason that short of a typo there's no algorithm related reason to make the "truth teller" numbers work.

 

2. Stalemate. There's nothing in my statement that the discretion by an executive in that scenario is not an indicator of bias. Only the executive in the scenario can cofirm and he or she is not talking and even if the no brainer incentive is self preservation.

 

3. Of course the use of discretion opens itself to room for bias. Many have chosen to ignore the posts of Marv Bear and a few others because they acknowledges the existence of racism in lending but I'm not one of them.

 

4. Repeating what I said in the other post, the applicant used as an example in the article was not initially denied for FICO, DTI or Down Payment. People are so used to their own confirmation bias that they can't, won't or don't see it when the situation does not fit their expectation. Do "you" really believe that mortgage companies are flooded with applications from minimum wage earning minorities believing they are going to get approved with a 627 FICO score, $5 down payment and $100K debt? Yes, I am sure that there are many unqualified borrowers of all races.

 

The point of interest that this article sparked in me is whether there is a racial bias with qualified borrowers? It is not an inappropriate or unimportant questions.

Carry your agenda elsewhere. I have no interest in further discussions that have their basis in race baiting and fake news.

 

However, as to #4...considering that I had a client who actually was one of the people 'verifying' fake jobs and incomes during the boom, yes there were people in precisely that scenario...and that $5 you reference was five bucks more than many put down on the NINJA loans that ALSO existed in that era. People of ALL races seem to believe there is an entitlement to home ownership. Just look at the incessant whining from the Left Coast.

My agenda is comfortable exactly where it is, therefore, your request much like mortgage applications to the minorities in the article is denied.

There is government regulation of FICO scoring models and minimum scores for Fannie Mae and Freddie Mac compliant mortgages.

 

Those regulations do not exist for CCs.

 

Nobody is calling a backdoor number to bypass those requirements for a mortgage.

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Those looking for race will always find something they feel justifies their claim. This article tried to do that but fails miserably. Qualified applicants are qualified, regardless of color and unqualified applicants are poor risks, again regardless of color.

 

These articles almost ALWAYS fail to provide information that suggest the profiled applicants were, in fact, qualified for a long-term debt instrument. Instead they almost ALWAYS try to point to approval numbers while tossing out every single other factor that is actually relevant to a decisioning process by prudent lenders.

The bolded is a curious statement considering we are posting in a forum that tracks back door numbers for people to talk their way into becoming qualified candidates after a denial. If qualified/unqualified is qualified/unqualified regardless, then how does a phone call change an unqualified applicant on paper into a qualified one via conversation? The answer is that room for bias is built into the credit system whether it happens through the front door or the back door.

 

I appreciate those backdoor numbers, at times my phone sex voice has changed hearts, minds and my credit line when my Fico Score couldn't.

1) anybody who calls a 'back door' is typically offering additional information that was not available to an automated decisioning process

2) there is nothing in your statement that shows that the use of discretion by an executive in that scenario is any sort of indicator of bias.

3) Room for the use of discretion is NOT the same as what you label as 'room for bias'

4) A person who is not qualified for a mortgage is not qualified...that they were a minority does not change this reality given that there are plenty of 'minorities' who ARE qualified and are in homes that their responsible financial management has allowed them to meet the criteria to obtain. Similarly, a white applicant who lacks the resources is still an applicant who lacks the resources to be qualified. As long as banks continue to heed the lesson learned with the nonsense such as NINJA loans, then we might continue to see mortgages only going to those who really CAN afford the monthly nut AND everything else that comes with the responsible home ownership elements.

1. The computer automated decision process is what is being deferred to in this thread as the foundation of neutrality. As I have been told in this thread "Numbers don't lie" so if you were unqualified before the phone call then it stands to reason that short of a typo there's no algorithm related reason to make the "truth teller" numbers work.

 

2. Stalemate. There's nothing in my statement that the discretion by an executive in that scenario is not an indicator of bias. Only the executive in the scenario can cofirm and he or she is not talking and even if the no brainer incentive is self preservation.

 

3. Of course the use of discretion opens itself to room for bias. Many have chosen to ignore the posts of Marv Bear and a few others because they acknowledges the existence of racism in lending but I'm not one of them.

 

4. Repeating what I said in the other post, the applicant used as an example in the article was not initially denied for FICO, DTI or Down Payment. People are so used to their own confirmation bias that they can't, won't or don't see it when the situation does not fit their expectation. Do "you" really believe that mortgage companies are flooded with applications from minimum wage earning minorities believing they are going to get approved with a 627 FICO score, $5 down payment and $100K debt? Yes, I am sure that there are many unqualified borrowers of all races.

 

The point of interest that this article sparked in me is whether there is a racial bias with qualified borrowers? It is not an inappropriate or unimportant questions.

Carry your agenda elsewhere. I have no interest in further discussions that have their basis in race baiting and fake news.

 

However, as to #4...considering that I had a client who actually was one of the people 'verifying' fake jobs and incomes during the boom, yes there were people in precisely that scenario...and that $5 you reference was five bucks more than many put down on the NINJA loans that ALSO existed in that era. People of ALL races seem to believe there is an entitlement to home ownership. Just look at the incessant whining from the Left Coast.

My agenda is comfortable exactly where it is, therefore, your request much like mortgage applications to the minorities in the article is denied.

There is government regulation of FICO scoring models and minimum scores for Fannie Mae and Freddie Mac compliant mortgages.

 

Those regulations do not exist for CCs.

 

Nobody is calling a backdoor number to bypass those requirements for a mortgage.

 

Ahh, I see the decade(s) long underwriting practices leading up to the subprime mortgage crisis of the previous decade was a mass hallucination. No backdoor action could have possibly happened on "Fanny" Mae and Freddie Mac's watch. Am I the only one who remembers why Countrywide no longer exists? Perhaps borrowers couldn't acces backdoor numbers but brokers certainly did. Or is the DOJ fake news as well?

 

The United States’ complaint also alleges that, as a result of Countrywide’s policies and practices, qualified African-American and Hispanic borrowers were placed in subprime loans rather than prime loans even when similarly-qualified non-Hispanic white borrowers were placed in prime loans. The discriminatory placement of borrowers in subprime loans, also known as “steering,” occurred because it was Countrywide’s business practice to allow mortgage brokers and employees to place a loan applicant in a subprime loan even when the applicant qualified for a prime loan . In addition, Countrywide gave mortgage brokers discretion to request exceptions to the underwriting guidelines, and Countrywide’s employees had discretion to grant these exceptions.

https://www.justice.gov/usao-cdca/dojcountrywide-settlement-information

 

Brokers are mentioned in the article which is why I'm mentioning them here. No need to "splain" the role of mortgage brokers or financial institutions. I got it.

 

Over ten years on this board and I'm simply amazed at the seemingly unflappable faith in lender infallibility.

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Since there is relevant 'proprietary' information withheld by the lenders, it's impossible to say whether racial bias is a significant factor in the disparity. I think there is no doubt that government promoted redline maps did harm to African American, and other immigrants, and that the effect of that harm has been transmitted down through families and communities. I think those factors would indicate that more transparency would be a good thing, and government mandates for lending standards would not.

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