African American applicants for mortgage loans are suppressed by rejection rates.
Junial Enterprises

In 2014, black applicants were denied for mortgages 23.5% of the time, compared with 9.4% for whites. A majority don't even apply for loans in the first place. Zillow staffer Melissa Alisson reports on the racial divide that exist in the mortgage application process. 

To get a better idea of the divide, Zillow Research took a look at the application rates for 2013 in mostly black and mostly white, middle-class neighborhoods around the country. They found that people in black neighborhoods apply for 44% fewer conventional loans but 37.5% more FHA loans. Georgia Institute of Technology Professor Dan Immergluck commented on the findings:

While black neighborhoods and borrowers need FHA loans, they also need more conventional loans, Immergluck said. He called for increased scrutiny of fair lending practices among conventional lenders, as well as so-called “duty-to-serve” requirements of Fannie Mae and Freddie Mac involving low- and middle-income families.

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