Navy Federal Credit Union, the largest credit union in the United States, allegedly rejected more than 50% of all Black applicants who applied for a new conventional home purchase mortgage, according to a report.
Last year, the Navy Federal Credit Union, which lends to military servicemembers and veterans, allegedly only approved the mortgage applications of less than 50% of Black borrowers. In comparison, the credit union approved over 75% of new conventional home purchase mortgages filed by White borrowers, as first reported by CNN Business, citing data from the Consumer Financial Protection Bureau (CFPB).
Specifically, only 48% of mortgage applications from Black borrowers were approved by the credit union in 2022. This went up to 56% for Latinos, 64% for Native Americans, 69% for Asians, and 77% for White Americans.
The outlet also noted that the credit union approved the applications of more White borrowers earning under $62,000 a year than it did Black borrowers making $140,000 or more annually.
In addition to income, the outlet found that the Navy Federal Credit Union was more than twice as likely to reject applications of Black borrowers even when their debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics were similar to White applicants.
In a statement, Navy Federal Credit Union spokesperson Bill Pearson defended the credit union's lending practices and said the outlet's analysis failed to take into account "major criteria required by any financial institution to approve a mortgage loan." However, the credit union refused to release additional data about its loans, the outlet noted.
Black Borrowers Face Higher Rejection Nationwide
Black Americans are more likely to have their mortgage application rejected across the country's 50 largest metros than White borrowers. On average, 14.44% of Black homebuyers are denied a mortgage, compared to a 9.14% rejection rate across the overall population, according to online lending marketplace Lending Tree, which analyzed the 2022 Home Mortgage Disclosure Act (HMDA) data.
Mortgage applications from Black applicants are more likely to be denied in Miami, Detroit, and New Orleans. In these metros, the lending platform found that the rejection rate for Black borrowers is 20.70%.
In contrast, denial rates for Black borrowers are lowest in Salt Lake City, San Antonio, and Houston.
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