Woah, Navy Federal is hella racist

[Anonymous]

Anonymous wrote:Weird. Black male here who applied for a mortgage this year and NFCU was actually the easiest to work with and easily got approved and they are currently my lender. Never had any problems with them. Maybe I’m one of the outliers.

Forgot to mention, this was for a 650k conventional loan, 30 year fixed back in February of this year.

[Anonymous]

Anonymous wrote:Weird. Black male here who applied for a mortgage this year and NFCU was actually the easiest to work with and easily got approved and they are currently my lender. Never had any problems with them. Maybe I’m one of the outliers.

They still approved half of black borrowers for conventional loans. It’s just that that NFCU’s approval rate was a lot lower for black borrowers compared to similarly situated (or poorer) white borrowers.

[Anonymous]

Getting loans approved involves a lot more than just income and credit score. Even if black applicants didn't have lower credit scores (which they do), you have to stay on top of things throughout the process - verify your assets, bank accounts, pay stubs, tax returns. You must not have above a certain percentage of other outstanding debt (perhaps black applicants more likely to have large car loans?). You must prove where your financing comes from - that it isn't a family member loaning you money. You have to be careful not to take out new credit or loans while you are going through the approval process (many people make this mistake because moving requires other outlays - that 0% for 12 months furniture store credit card is awfully tempting). There are numerous steps at which the process could go awry and certain groups may be more likely to make these admittedly seemingly small errors that derail the loan approval

[Anonymous]

My BIL worked at a bank as a mortgage processor. Lots of Spanish people got denied simply cause they could not figure out application process. He literally would spend double the amount of time on these applications as they needed a lot of handholding.

Many had off the book jobs, some barely spoke English, many new to country. And yes they has a higher denial rate. But is that racism?

[Anonymous]

Having been a military family for 30 years, and only basing it on anecdotal experience, I would bet it's debt to income ratio. High car payments were the norm for lower ranking black soldiers. I remember driving our chevy cavalier for years while our friends were driving BMWs and fancier model Nissans.

[Anonymous]

Don’t most loan officers get paid per closure? I doubt they would not push black customers through choosing racism over paycheck. It has to be a statistical anomaly based off their specific customers. Loans are hard, it isn’t like a car loan where you show up with a pay stub and one else does all the work.

[Anonymous]

Anonymous wrote:Having been a military family for 30 years, and only basing it on anecdotal experience, I would bet it's debt to income ratio. High car payments were the norm for lower ranking black soldiers. I remember driving our chevy cavalier for years while our friends were driving BMWs and fancier model Nissans.

Exactly. DTI is not even mentioned in the article. Even with great credit and a great income, if you have a car payment of $2000 a month and revolving credit of $1000 a month, that can deny your loan, even if you technically can afford it.

I’m black myself, but this article doesn’t sit right with me the way it’s framed. I actually prefer that lenders are stricter than they were to prevent another 2008 situation from happening again where they gave you a mortgage just for having a heartbeat. I had to go through hell and back to get everything approved for my loan but it didn’t bother me because I knew I was legit.

[Anonymous]

Anonymous wrote:My BIL worked at a bank as a mortgage processor. Lots of Spanish people got denied simply cause they could not figure out application process. He literally would spend double the amount of time on these applications as they needed a lot of handholding.

Many had off the book jobs, some barely spoke English, many new to country. And yes they has a higher denial rate. But is that racism?

Are you saying people from Spain are applying for loans and need extra help navigating the process?

[Anonymous]

Anonymous wrote:One thing to note:
CNN’s analysis is for conventional mortgages. These are mortgages with standardized terms and the lowest interest rates.

They may have been rejecting them for conventional products in order to steer them to higher priced non-conventional products like ARMs.

How do VA loans factor in - we are military and among our cohorts we all get VA loans because they give better rates than conventional.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Having been a military family for 30 years, and only basing it on anecdotal experience, I would bet it's debt to income ratio. High car payments were the norm for lower ranking black soldiers. I remember driving our chevy cavalier for years while our friends were driving BMWs and fancier model Nissans.

Exactly. DTI is not even mentioned in the article. Even with great credit and a great income, if you have a car payment of $2000 a month and revolving credit of $1000 a month, that can deny your loan, even if you technically can afford it.

I’m black myself, but this article doesn’t sit right with me the way it’s framed. I actually prefer that lenders are stricter than they were to prevent another 2008 situation from happening again where they gave you a mortgage just for having a heartbeat. I had to go through hell and back to get everything approved for my loan but it didn’t bother me because I knew I was legit.

CNN's analysis controlled for DTI:

A deeper statistical analysis performed by CNN found that Black applicants to Navy Federal were more than twice as likely to be denied as White applicants even when more than a dozen different variables – including income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.

[Anonymous]

Anonymous wrote:

Anonymous wrote:One thing to note:
CNN’s analysis is for conventional mortgages. These are mortgages with standardized terms and the lowest interest rates.

They may have been rejecting them for conventional products in order to steer them to higher priced non-conventional products like ARMs.

How do VA loans factor in - we are military and among our cohorts we all get VA loans because they give better rates than conventional.

I'm almost certain that VA loans are not covered by this article. As you mentioned, those usually have better terms for service members than even the "conventional" mortgages available to civilians. And there's no incentive to NCFU to deny a VA loan to a borrower as long as they meet the checklist of requirements applicable to a VA borrower. In short, when a bank facilitates a VA loan they are essentially acting a facilitator for the VA and receive a fee for the work on process the loan.

My inclination is that this article is primarily covering NCFU borrowers who are civilians.

[Anonymous]

Is there any information on the credit scores and creditworthiness of the borrowers by race? What is the sample size for the communities at each income level?

Where is the credit history?

[Anonymous]

Navy Federal had stricter standards for POC vs whites, so that should mean that whites had a much higher default rate as they got more high risk loans?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My BIL worked at a bank as a mortgage processor. Lots of Spanish people got denied simply cause they could not figure out application process. He literally would spend double the amount of time on these applications as they needed a lot of handholding.

Many had off the book jobs, some barely spoke English, many new to country. And yes they has a higher denial rate. But is that racism?

Are you saying people from Spain are applying for loans and need extra help navigating the process?

What do you call them? Mexicans?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My BIL worked at a bank as a mortgage processor. Lots of Spanish people got denied simply cause they could not figure out application process. He literally would spend double the amount of time on these applications as they needed a lot of handholding.

Many had off the book jobs, some barely spoke English, many new to country. And yes they has a higher denial rate. But is that racism?

Are you saying people from Spain are applying for loans and need extra help navigating the process?

What do you call them? Mexicans?

Good lord, this is dumb.