Consumer groups must be getting bored with the current foreclosure fault-fest. A recent article on Women’s eNews© claims that advocacy groups including the Consumer Federation of America believe that gender bias in mortgage lending is “quite common.” According to Allison Stevens, the author of the article, “The government currently screens for disparities based on race and ethnicity, but not on gender, making it difficult to assess precisely how widespread this type of discriminatory lending is.”
Um, has this woman ever seen a 1003 mortgage app? And what part of “Information for Government Monitoring Purposes” does she not understand? It’s all right there, Part X, that gathers ethnicity, race, and sex information for monitoring lender “compliance with equal credit opportunity, fair housing and home mortgage disclosure laws.”
So that takes care of the government monitoring question. Now, how about approvals — are women getting bounced for simply being women?Don’t think so –underwriting is largely done with programs like Loan Prospector and Desktop Underwriter; those computerized suckers don’t give a rat’s, uh, tail what the applicant’s gender is, but they do like to see enough income to make a payment and a few months’ reserves.
Finally, lenders are businesspeople and discrimination is simply bad business. If someone qualifies for a full-doc prime loan, why on earth would anyone quote them an Alt-A or subprime deal? Unless they only sell subprime loans or hard money? LOs can price in a decent profit regardless of the product offered, but would be far more likely to lose the deal to the guy down the street (or the next URL) by pricing higher than warranted. To make the assumption that gender discrimination is “common,” the logical conclusion is that it is also “common” for women to work with lenders who only offer subprime products, that it is “common” for women to forego shopping for a good deal (like that will ever happen), and that it is “common” for women to be less intelligent or discerning than men (don’t get me started here).
One of these groups took a 2006 government report and interpreted the data to conclude that women as a group pay more for mortgages than men with similar credit scores. But the government did not in fact conclude that the disparity was due to discrimination by lenders. As we all know, credit is only one part of a loan application. It’s an unfortunate fact that women in this country as a group earn less than men, particularly those whose career is interrupted by family obligations. And it’s no secret that nearly half of American marriages end in divorce and that it’s the woman who takes the brunt of the financial hit. Spousal support has become an anachronism, and child support is often unreliable and inadequate. Additionally, women are disproportionately represented in service industries which are characterized by low job security and minimal benefits.
So you have a single mom, re-entering the workforce (maybe she gets credit for her new income, maybe she doesn’t until she’s been on the job a couple of years), and she gets child support the underwriter can’t count unless the applicant’s been receiving it — on time — for a while. She will in all likelihood have a harder time getting a mortgage than her ex.
And that’s a crappy deal. And it should be changed, but not by insulting women, saying that we are too helpless and dumb to get loans without special protection. Gender discrimination and income disparity isn’t about lending — it’s about life.
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