Your hypothesis is flawed from the start because it assumes that the credit score is the ONLY criteria that lenders use in approving a mortgage.
I recently purchased my first home and my credit score was one of many factors the lender assessed. The preliminary for approval was based on income, debt, debt TO income, and credit score. I was approved for up to $400k to purchase a home. Once I found a home the secondary part of the process looked at tax returns, bank statements, length of employment, and appraisal before final approval. At NO point in the process was my race ever discussed and I never met with the lender face to face. It was all by email or phone call. The neighborhood I am in would not have even helped the lender as it is VERY mixed race/ethnicity. I was approved for my home because of a good not great score, solid income and employment, and excellent debt to income ratio. Race and/or redlining wasn't even a consideration.
The second factor that undermines your theory is the housing crisis. Affordable housing has all but evaporated in this country. The reasons why incite too much vitriole but the reality is sellers have no trouble finding multiple qualified buyers and those with the most money win the battle. Lenders don't have to use race as a factor in declining a mortgage application. Your credit score can be over 700 with minimal debt but if you want to buy a home in an area where prices average $450k or more for basic homes not even McMansions and your income is less than $100k per year the chances are slim you will be approved at today's rates even with an excellent score. The resulting payment with PMI if required along with home owner's insurance and taxes could put the payment at more than 50% of take home which no lender is going to approve regardless of your other factors.
Over the past 3 years I have seen multiple posts on social media from a rainbow of people all screeching that because they pay $2000/month in rent or more they should just be approved for a mortgage. As a current home owner they are clueless as to what is involved with owning a home. The amount of money needed to support this NEVER ends. The work, the upkeep, and repairs keep coming and that doesn't even scratch the aesthetic needs/wants home owners have. I would LOVE a back yard oasis with a pool/spa. Not going to happen any time soon. Could I go further into debt and take out more loan(s) to get a pool? Sure. Is it the smart thing to do? No it isn't. I am happy with my purchase and wouldn't change anything but my race, gender, ethnicity are non-factors in my home purchase. There are too many other forces at work keeping lower earners down than simply minority decision making.
Bot or not?🤔
@vntrsc wrote:Perhaps the moderators of this forum might want to chime in.
From https://ficoforums.myfico.com/t5/User-Guidelines-General/5-Things-We-Don-t-Talk-About/td-p/336929
5 Things We Don't Talk AboutTo maintain the spirit of friendliness and support that makes the FICO Forums the kind of place we've come to value, please be respectful of others by avoiding references to certain topics that might be offensive or hurtful. These topics include, but are not limited to:
* Race
* Nationality
* Sex
* Religion
* Politics
I feel the post is borderline, but due to redlining being a valid concern, even in this day and age, it is a valid topic. I did not report it as it was a well thought out and expressed question. Should the conversation devolve into strictly racial talk, the thread can be reviewed for moderation.
