This research has provided a descriptive glance at the frequencies by which lenders and lending variables show comparable and/or differential results in women’s ability to obtain mortgages. The data suggests several areas where further scrutiny and other action is required. These conclusions are described below along with accompanying recommendations to address these concerns.
1. Men apply for mortgages more than women. Females were found to be four times less likely than men to be the primary mortgage applicant. This statistic may reflect both the demographic and cultural situation. A reasonable assumption is that the pool of female applicants includes many who are heads of household. Census figures for the state show female heads of household exist at the rate of one for every five married-couple families. This study did not examine co-applicants. In addition to demography, the prevalence of so many men applying for mortgages may be the result of a cultural tendency for males to be listed first on a mortgage application, with females (often as spouse) listed as co-borrower. Consequently, there may be many women left undetected by this study. More research is needed to confirm the degree of female participation in mortgage lending.
2. It appears that women, on the whole, have as good a chance as men at having their mortgage applications approved and should be encouraged to apply. At the state and top 50 totals, women had mortgages approved at the same rate as men. At certain income and racial categories, female origination rates even exceeded that of males. Race and income, more than gender, seems to determine who gets mortgages.
3. Minority women (as well as minority men) have a much lower opportunity to have a mortgage approved. Two findings lead to this conclusion. The first is that racial and income differences exist in the rate of mortgages made to minority women. At both the state and top 50 totals, white women, with one exception, had higher rates of origination than non-white females at all income groupings. In contrast, Black females had the highest intra-racial rate among women in applying for mortgages. Black women surpassed or nearly equaled the amount of applications filed by Black men at the low- and moderate-incomes, respectively. Black females, though, had the lowest female-rate of success per income group in getting those applications approved (with the exception at the moderate-income level, where Black women ranked next to last.). Since at lower-income levels, females account for a large proportion of the applications made by Blacks, race and income disparities have a negative effect on gender. Minority men, except in one instance, fell consistently lower than White males in originations. Compounding the problem of different origination rates, is the second finding that there are a number of small lenders which have not issued mortgages, nor even taken applications, from Black and/or Hispanic females. With nearly half of the state’s Black families, and one-quarter of its Hispanic families, with children under 18 years of age, headed by females, it is imperative that minority females have an equal opportunity to buy a home.
There may be explanations for these racial discrepancies which cannot be determined because of the limitations of this research. Some examples are the following. There are many more White, than non-White applicants, which can skew the data. Within this larger pool, there is a possibility of having more applicants with better qualifications, e.g., more credit-worthy, than in the smaller non-White group. Median family income for minorities (with the exception of Asians) is lower than that for Whites. Minority income may be clustered at the lower end of each income group and non-minority at the high-end. The branch institutions with non-existent lending activity to non-Whites may be geographically underrepresented in minority areas and overly represented in areas with little minority population. It is beyond the scope of this research to conclusively define why lending to minorities lags behind that of Whites.
4. Variations exist in lenders behavior. Where should women go for mortgages? The answer is to shop around. There are variations within the top 50 institutions which may result in better deals for prospective female homeowners. Indeed, at 29 of the top 50 lenders which included institutions of all size, women had better odds than men at obtaining a mortgage. The lenders ranking first and second in female-to-male origination rates were not the largest lenders but rather two small institutions which originated all but one application. The seven large lenders in this study comprise nearly half of the top 50’s volume of mortgages to women and they would certainly have experience in providing loans to women. But within this high-volume group, favorably to women also varies.
Some institutions should be approached cautiously. Several of the small institutions (those making under 400 loans per year), were found to rank consistently low in the rate of taking applications, and granting loans, to women, compared to men. Knowing which lender gives the best deal involves education about institutions and sophistication to work through the maze. Similar concerns were raised in the focus groups involving New Jersey Citizen Action’s Loan Counseling Program clients and staff.
Three recommendations are proposed to address these issues:
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