SC lender disputes report citing it for racial lending disparities in mortgages
A new analysis from the non-profit newsroom The Markup has ranked a Charlotte-area lender among the worst in its study of racial lending disparities.
The investigation released Wednesday by The Markup found that in 89 U.S. metro areas, minority applicants were more likely to be denied conventional mortgages than similarly qualified white applicants, according to 2019 federal data from the Home Mortgage Disclosure Act.
The Markup stated that in 2019, Indian Land, S.C.-based Movement Mortgage was 110% more likely to reject both Black and Latino applicants than similarly qualified white ones.
Movement Mortgage disputed the findings. In a statement to The Markup, the company said that using Home Mortgage Disclosure Act data to evaluate racial disparities results in incomplete findings that can be “misleading and damaging.”
“HMDA data does not account for borrower credit scores, which is among the most significant factors in credit decisions by mortgage lenders,” the company said. “Without that information, it is impossible for a third party to determine that a lender is disproportionately denying a protected class of borrowers.”
Movement Mortgage did not respond to an Observer request for comment Wednesday about The Markup report.
More than 5,500 companies reported data to the federal government in 2019 for every loan application they processed, according to The Markup’s report. Only the top 1% of lenders processed enough applications for a statistical analysis of their practices.
The Markup said it found more than 24 companies that showed statistically significant lending disparities, including Movement Mortgage.
Industry issues
The disparities The Markup found for individual lenders mirrored those exhibited by the industry as a whole.
Across all lenders, Black, Latino and Asian prospective borrowers were denied home loans at higher rates than white applicants, despite similar lending qualifications such as debt-to-income ratio.
Black applicants in the Charlotte metro area were 1.5 times as likely to be denied as white applicants. The city fared better than others in the Carolinas: in Wilmington, Black applicants were 2.4 times as likely to be denied a loan. In Florence, S.C., that likelihood was 2.5 times higher.
The 2019 data used for the analysis includes only statistics reported to federal agencies for conventional home loans.
About Movement Mortgage
Movement Mortgage was founded by former Carolina Panthers tight end Casey Crawford in 2008. The company has more than 4,000 employees, according to its website, and has added hundreds of new employees in recent years.
The company has advocated for increasing rates of Black homeownership on its website and its social media pages.
Movement Mortgage’s non-profit investment arm, the Movement Foundation, has funded the creation of the Movement School, a network of charter schools in Charlotte, as well as affordable housing and health care initiatives.
This story was originally published August 25, 2021 at 6:11 PM with the headline "SC lender disputes report citing it for racial lending disparities in mortgages."
