Ethno-Racial and Credit Worthiness Disparities in Access to Mortgage Credit.

This article examines ethno-racial disparities in mortgage outcomes in the United States by analyzing Home Mortgage Disclosure Act (HMDA) data from 2018 to 2019, focusing on the role of debt-to-income (DTI) ratios as a measure of credit worthiness. The study finds that Black and Latino applicants face higher rates of mortgage denial and high-cost loan originations compared to White and Asian applicants across all DTI levels, with Black and Latino borrowers with excellent DTI ratios experiencing similar or worse loan outcomes than Whites and Asians with poor DTI ratios. Asians generally perform similarly to Whites, though they have slightly higher denial rates. These disparities persist even after controlling for socio-demographic, loan, neighborhood, and locational factors, highlighting ongoing ethno-racial stratification in access to homeownership and its implications for wealth inequality and social mobility. The article also notes limitations in the HMDA dataset, such as the absence of credit scores and wealth measures, and calls for improved data collection to better assess and address discrimination in mortgage lending.