In 2023, Mississippi recorded the highest mortgage denial rate at 19%, followed closely by Louisiana at 18% and West Virginia at 15%. This stark contrast emerges from an analysis of the Home Mortgage Disclosure Act data, revealing significant disparities across the nation. Contributing factors to these denials include insufficient credit, income fluctuations, high debt-to-income ratios, and certain loan types. The report also highlighted racial disparities, with 21% of Black applicants denied loans compared to 11% of white applicants, indicating systemic issues in the mortgage approval process that perpetuate inequities in homeownership.
In 2023, Mississippi, Louisiana, and West Virginia had the highest mortgage denial rates in the U.S., highlighting significant state-level disparities in loan acceptance.
A mix of borrower, loan, and market characteristics likely explains state-level variation in mortgage denial rates, emphasizing the complexity of the lending landscape.
Black applicants faced a 21% denial rate compared to 11% for white applicants, showcasing alarming racial and ethnic disparities in mortgage approvals.
Black and Hispanic borrowers are often more reliant on FHA loans with higher fees and interest rates, limiting their homeownership opportunities.
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