Mississippi’s Legislative Black Caucus is holding a hearing to determine if race plays a role in mortgage lending. MPB’s Desare Frazier reports.
The Consumer Financial Protection Bureau reports Blacks in Mississippi are more than twice as likely to be denied a mortgage loan as Whites. Mississippi’s Legislative Black Caucus wants to know why. Sam Mozee, a researcher at Jackson State University says, factors unrelated to race are involved.
“Worse credit scores, lowered income limits, higher debt limits, those are the major factors that contributed, the way the criteria is set-up those factors play a critical role in determining who gets approved,” said Mozee.
Officials with Hope Credit Union say it’s seldom clear race is the sole reason a loan is denied. Sandra Patterson is with the credit union. She says they take a non-traditional approach to home loans by reviewing bill paying history.
“If they can show us utility bills that they pay monthly. It’s pretty much a gamut of anything. We let them tell us what do you pay monthly that’s a regular note, regular basis, that’s historical,” said Patterson.
Democratic Senator John Horhn of Jackson would like banks to take a similar approach.
“They have a very low loss rate and charge off of less than 1 percent and they’re using some non-traditional critiera to do loans," said Horhn.
Senator Horhn says Mississippi is the only state without a law prohibiting discrimination in financial transactions. He says they’ll introduce a bill to close that loophole in January. In 2016 the U.S. Department of Justice fined a Mississippi-based bank for discriminatory lending practices in Memphis.