Women In Housing-2015

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Page 26 of 67

Th e M Rep o RT | 25 Feature I n the ongoing discussion of gender equality, the pay gap between men and women gets a good deal of attention. From construction to financial services, the difference between what men and women earn for the exact same job is a hot topic. While this gap is not new, more and more families are dependent on a woman's income to live. The pay gap between the sexes has far-reaching consequences, ones that should cause the industry to sit up and take notice—the primary two being the opportunity to make more loans and Fair Lending issues. This article takes a look at how big a factor the disparity in income levels is in mortgage lend- ing decisions, and considers what other factors may be at play. Exploring the HMDA Database D avid Moffat, president of Mortgage TrueView, Inc., analyzed Home Mortgage Disclo- sure Act (HMDA) data on women and mortgages. The MTV database contains HMDA data results from the years 2009 to 2013, the latest HMDA data available. There are many things this data cannot tell us, so it is impossible to make absolute statements about approvals and denials, but the data did pro- vide some interesting information. Of the total applications during this four-year period, exclud- ing those that were identified as "purchased from other lenders," 13,619,961 listed female as the primary applicant and 47,626,541 listed male as the primary appli- cant. Using the information pro- vided resulted in a 2.5 to 1 ratio of male to female applicants. The data was then broken down by race to determine if there were any particular races where female applicants were disproportionate to male applica- tions. Table 1 shows female and male applications by race. Slightly over 45 percent of all black applicants are women, while just over 27 percent of white and Asian applicants are females. While this finding requires addi- tional review and analysis, it does raise the possibility that this may be one of the reasons why blacks are 2.5 times as likely to be denied mortgages as whites. One issue always at play is income: it is expected that income would be a major factor in the difference between male and female applicants. In fact, we would expect to see more females denied than males across the board, as well as by race. By analyzing the Mortgage TrueView HMDA database for this information, it is easy to determine if it's true. One compli- cation in conducting this analysis was the fact that not all lenders were required to provide applicant income at the time this data was submitted. As a result, 8 percent of the applications had to be excluded from this piece of the analysis. Using the data available, Mortgage TrueView found that in aggregate, 17.7 percent of all applications were denied during this four-year period. The results of the study based on incomes reveals that there is a slightly higher rate of denials for females than males. In aggregate, females are denied at a rate of 20 percent of applications while males are denied at a rate of 16 percent. To further identify where these denials occurred, the Mortgage TrueView data was divided into four income groupings, as shown in chart 2. The chart also shows the denial rates for applications where gender was unknown. While there are many reasons that the gender was not provided, it is clear that having that informa- tion could give us greater insight into the drivers of denials as the percentage differences in the "no gender provided" group are consistently higher than the groups where the gender is known. Applicants in the lower income groups—those earning $75,000 or less per year—have either identical denial rates or nearly identical rates. Yet for the two higher income levels, females are denied more frequently than males. This variance tells us that there is likely something other than income behind the disparity between the number of denials for female and male applicants. The outcome changes, however, when we add race into the mix. When we look at black female applicants with annual income between $0 and $50,000, we find that 43 percent of these loans were denied, while for black males in the same income group, 41 percent of them were denied. For whites in this same income group, 18 percent of females were denied while only 15 percent of white males failed to gain approval for their mortgage. A similar result is found within Asian applicants. Of the females who applied, 17 percent within this income group were denied while only 14 percent of the Asian males were denied. So what does all this tell us? Based on the information pro- vided by this data there is clear evidence that females are denied more frequently than males. This problem is exacerbated when race is added into the equation, particularly for blacks. However, income does not appear to be the primary driver of this problem. Income isn't the only issue O f course income levels matter, but research into the areas of female income and wealth show that the underlying issues are much broader than simple income inequity. What is evident is that income issues also create gaps in overall wealth for women which causes them much more financial harm than the resulting income inequity. According to Dr. Mariko Chang, as outlined in her book Shortchanged, while the income gap is slowly declining, women have only 36 percent as much wealth

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