- Alaska is ONLY state where women and men mortgage holders pay equal rates
- Single women less likely to default on mortgages than single men
Data from Home Mortgage Disclosure Act (HMDA)is Go-To Source for Loan-Level Information
Enacted by the US Congress in 1975, the Home Mortgage Disclosure Act (HMDA) requires financial institutions to maintain, report, and publicly disclose loan-level information about mortgages.
For example, a report published by the Consumer Financial Protection Bureau (CFPB) on March 1 2021 found, based on HMDA data, that 2.1M families were behind at least three months on their mortgage payments (as were 8.8M behind on their rent). Those missed mortgage payments total some $90B
OwnUp, a digital mortgage marketplace start-up, analyzed HMDA data to discover that women pay higher mortgage rates than men in 49 of 50 states. (The lone exception is Alaska.)
The result? Over the lifespan of the mortgage, the single woman will pay approximately $7,000 more in mortgage payments than a single man.
Discrimination in Home-Financing Process?
According to Patrick Boyaggi, CEO and founder of OwnUp,said, “The latest HMDA data makes it startlingly clear…recent HMDA data confirms that discrimination in the home-financing process is very real…”
The five states where women overpay the most on mortgage loans include Mississippi (delta of $7,077 over mortgage lifespan), Alabama (delta of $6,006), Ohio (delta of $5,856), Florida (delta of $5,591) and New Jersey (delta of $5,15).
The five states where single women pay comparable mortgage rates to single men include Alaska (the best), Maine, Wyoming, Montana and Oregon.
Possible Reasons Why Women Pay Higher Mortgage Rates
Research done by the Urban Institute (UI) found that, despite paying higher mortgage rates, single women were better at consistently paying their mortgages than single men.
The UI research also found that single borrowers, especially women, were more likely to be minorities from lower-income areas. Also, women tend to have weaker credit profiles than men.
Guy Cecala, CEO of Inside Mortgage Finance, told Wharton Business Radiosome years ago, “The mortgage market prides itself on being color blind, and essentially using a black box, but any sort of black box basically discriminates against single borrowers, lower-income borrowers and borrowers with lower credit scores. If those (borrowers) happen to be predominantly women, you have to assume that they are getting that kind of treatment from the mortgage market.”
OwnUp’s Boyaggi Offers No Solutions, Just Comparisons
Boyaggi believes that the more people who know about discriminatory mortgage financing, the better. He offered the following comparison.
“’Hey, this gas station charges women 10 cents more than men.’ And we’d be in an uproar. There would be stories about it everywhere, right? People would vilify that gas station, and rightly so.”
Thanks to OwnUp and HousingWire.
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