Illinois REALTORS® released a new study, Color and Collateral, which shows that race plays a potentially large role in the rejection of home loan applications and appraised values of homes in Illinois.
The study analyzed millions of mortgage applications, which revealed:
- A substantial disparity in the denial rates of African American and White applicants
- African American applicants in Illinois are twice as likely to have mortgages denied due to lack of collateral
- Neighborhood homogeneity appears to be rewarded by appraisers. White borrowers were more likely to have their mortgages denied if they lived in neighborhoods with more people of color. However, Black and Hispanic/Latino borrowers were relatively less likely to have their mortgages denied if they lived in more diverse neighborhoods