Woah, Navy Federal is hella racist

[Anonymous]

They are terrible. I have had nothing but issues with them for a mortgage and banking. Never again would I use them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How is a conclusion that only includes one single data point valid? What about down payments--yes, privileged white people are much more likely to have down payments given to them--debt, and most of all, credit score? Such a flawed and biased story.

Well the story focused on a black man who was rejected for a loan with 700+ FICO, 20% down payment, $100K income, and SFH owner occupied use. That’s a slam dunk underwriting approval.

And how much was he asking for?

If you actually bother to read the article you'd know.

He was quickly approved by another lender and bought the house. The real question is why Navy Federal's disparity in approval rates is so much larger than every other bank's. Differences in black and white average credit score would lead to a disparity in mortgage approval rates, of course. But it's doubtful this general difference in credit scores by race would explain why Navy Federal's disparities in mortgage approvals is so much larger than other mortgage lenders.

I'm not surprised. Mortgage companies like Rocket, Caliber, Loan Depot, Mr. Cooper all have lower lending standards than the banks.

Typically its:
Big bank 700+ credit score
Smaller Bank CU 650+
Non bank 620+

[Anonymous]

Anonymous wrote:The man in the story bought a house that was listed for $415K with “over 20% downpayment” and an income greater than $100K.

I found the house he bought using public record search. It matches the photo in the CNN article. He can clearly afford this house.

Further, the man stated that he had no major debts and was already preapproved by NavyFed. Preapprovals always require a soft proof of income (either W2s or previous taxes) and credit check (to figure out DTI), so the bank can figure out how much to they can put on the preapproval letter. Sure, it’s not a full underwriting but they have a good ballpark of what you can afford.

This guy in 2021 could easily afford a $325K mortgage.

Don't they always say if you do something stupid in the home buying process like buy a car or open a new credit card you could be denied? I've definitely heard of people losing approval under thise circumstances.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The man in the story bought a house that was listed for $415K with “over 20% downpayment” and an income greater than $100K.

I found the house he bought using public record search. It matches the photo in the CNN article. He can clearly afford this house.

Further, the man stated that he had no major debts and was already preapproved by NavyFed. Preapprovals always require a soft proof of income (either W2s or previous taxes) and credit check (to figure out DTI), so the bank can figure out how much to they can put on the preapproval letter. Sure, it’s not a full underwriting but they have a good ballpark of what you can afford.

This guy in 2021 could easily afford a $325K mortgage.

Don't they always say if you do something stupid in the home buying process like buy a car or open a new credit card you could be denied? I've definitely heard of people losing approval under thise circumstances.

If that was the case, the other lender would not have easily approved him in a quickie 14 day close.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:lol racists trying to explain this away.

SMFH

Cool now show how that credit score differential justifies the differential in approval rates based on risk to the lender.

WE’LL WAIT lol.

Cool, we don't have to point out the obvious risk to you.

WE WON'T WAIT lol.

It’s not obvious, obviously.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The man in the story bought a house that was listed for $415K with “over 20% downpayment” and an income greater than $100K.

I found the house he bought using public record search. It matches the photo in the CNN article. He can clearly afford this house.

Further, the man stated that he had no major debts and was already preapproved by NavyFed. Preapprovals always require a soft proof of income (either W2s or previous taxes) and credit check (to figure out DTI), so the bank can figure out how much to they can put on the preapproval letter. Sure, it’s not a full underwriting but they have a good ballpark of what you can afford.

This guy in 2021 could easily afford a $325K mortgage.

Don't they always say if you do something stupid in the home buying process like buy a car or open a new credit card you could be denied? I've definitely heard of people losing approval under thise circumstances.

If that was the case, the other lender would not have easily approved him in a quickie 14 day close.

So your proposing that the most likely scenario is that someone at Navy Fed said oh this guy is black, denied?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The man in the story bought a house that was listed for $415K with “over 20% downpayment” and an income greater than $100K.

I found the house he bought using public record search. It matches the photo in the CNN article. He can clearly afford this house.

Further, the man stated that he had no major debts and was already preapproved by NavyFed. Preapprovals always require a soft proof of income (either W2s or previous taxes) and credit check (to figure out DTI), so the bank can figure out how much to they can put on the preapproval letter. Sure, it’s not a full underwriting but they have a good ballpark of what you can afford.

This guy in 2021 could easily afford a $325K mortgage.

Don't they always say if you do something stupid in the home buying process like buy a car or open a new credit card you could be denied? I've definitely heard of people losing approval under thise circumstances.

If that was the case, the other lender would not have easily approved him in a quickie 14 day close.

So you’re proposing that the most likely scenario is that someone at Navy Fed said oh this guy is black, denied?

Until NavyFed comes up with a reasonable explanation, I’m going to go with Occam’s Razor: the bank’s loan officers are more likely to steer ethnic minorities to higher cost, non-conventional loan products even when it’s clear those borrowers qualify for a conventional mortgage. Remember, he was denied conventional financing - that’s the entire premise of the CNN article.

I bet they offered him one of their crappy portfolio loan products that trade at +200-300bps relative to GSE approved loans and he wisely told them to pound sand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I thought applications couldn’t ask race?

No, it’s the reverse - applications for mortgages MUST ask for race. You don’t have to answer but the loan officer then has to guess.

Before or after loan approval?

[Anonymous]

Crap. I just switched from Wells Fargo to Navy Federal. Do I need to switch again? Where should I go?

[Anonymous]

Anonymous wrote:lol to people who are shocked there is systemic racism in housing.

Did you just wake from a coma?

Some of them will fall right back into that coma once this story dies down as per usual.

[Anonymous]

You’re crazy if you think a whole credit union cs. get together all of the hourly paid loan officers and tell them to give loans to white people and not the minorities. Firstly, I’m thinking most of the customer service reps at places like Navy Federal are minorities.

Either way, the “company” is not racist. It’s their policies. The larger banking companies have things in place to make sure that the end result does not “look” bad. Credit unions like this, can’t afford to or didn’t think it was worth it.

Part of the reasons credit unions are so cheap, because they spend a lot less money and have a lot less overhead. Big banks pay their executives big money and have lots more lawyers and people invested in regulatory issues that have seen this before, and know that in the end, regardless of what the results are, they should cover themselves and make sure that it doesn’t “look” bad.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How is a conclusion that only includes one single data point valid? What about down payments--yes, privileged white people are much more likely to have down payments given to them--debt, and most of all, credit score? Such a flawed and biased story.

Well the story focused on a black man who was rejected for a loan with 700+ FICO, 20% down payment, $100K income, and SFH owner occupied use. That’s a slam dunk underwriting approval.

How does someone making $100k have such Fico? I make half of that and have 833.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The man in the story bought a house that was listed for $415K with “over 20% downpayment” and an income greater than $100K.

I found the house he bought using public record search. It matches the photo in the CNN article. He can clearly afford this house.

Further, the man stated that he had no major debts and was already preapproved by NavyFed. Preapprovals always require a soft proof of income (either W2s or previous taxes) and credit check (to figure out DTI), so the bank can figure out how much to they can put on the preapproval letter. Sure, it’s not a full underwriting but they have a good ballpark of what you can afford.

This guy in 2021 could easily afford a $325K mortgage.

Don't they always say if you do something stupid in the home buying process like buy a car or open a new credit card you could be denied? I've definitely heard of people losing approval under thise circumstances.

If that was the case, the other lender would not have easily approved him in a quickie 14 day close.

We got the run around from navy fed and we are white. It’s a bad disorganized bank. Went to another and got through it much easier and quicker. It may not be race but incompetence but both bad.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I thought applications couldn’t ask race?

No, it’s the reverse - applications for mortgages MUST ask for race. You don’t have to answer but the loan officer then has to guess.

Before or after loan approval?

Before approval. They need to know this so that at the end can run an analysis to make sure there is fairness and not discriminatory practices.

Same for college admissions and the reason lots of employmemt applications ask about whether you know someone that works there. It’s not for them to use the information in making their decisions; it’s for them to use the information to ensure that the end results are equitable (larger companies may chznge hiring practices if they end up with a higher percentage of nepotism)

In the end, if they run race-blind mortgage loan acceptance and realize that it skews white or that they are seemingly discriminating against a certain race then would need to change their policies.

The problem is it seems like a place like Navy Federal hasn’t been running these analysis Or they would have known this before CNN found out.the other banks are smart enough and big enough and spend more money to have done this and would have changed their policies if so.

[Anonymous]

Anonymous wrote:You’re crazy if you think a whole credit union cs. get together all of the hourly paid loan officers and tell them to give loans to white people and not the minorities. Firstly, I’m thinking most of the customer service reps at places like Navy Federal are minorities.

Either way, the “company” is not racist. It’s their policies. The larger banking companies have things in place to make sure that the end result does not “look” bad. Credit unions like this, can’t afford to or didn’t think it was worth it.

Part of the reasons credit unions are so cheap, because they spend a lot less money and have a lot less overhead. Big banks pay their executives big money and have lots more lawyers and people invested in regulatory issues that have seen this before, and know that in the end, regardless of what the results are, they should cover themselves and make sure that it doesn’t “look” bad.

It’s a mix at the branches but I’ve had nothing but issues with them. Pen fed ended up being cheaper and better. USAA sucks as they sell the mortgages. They are just incompetent and don’t care as many use them on base as it’s easy.