MBA Statement on The Markup’s ‘Flawed Analysis’ of Mortgage Lending

The Mortgage Bankers Association on Wednesday released the following statement regarding a report by The Markup, an investigative journalism group, on its “flawed analysis” of mortgage lending:

“The issue of fair lending is an important one, and MBA has and will continue to advocate for policies and practices that ensure lenders responsibly offer credit to all qualified borrowers regardless of the color of their skin. The issues around the lack of affordable housing and the Black homeownership gap are real, and our members are committed to doing all we can to address them.

“From the beginning, we explained to The Markup that its analysis of HMDA data, and its pre-determined conclusions regarding mortgage lending, fail to take into consideration several key components that form the backbone of lending decisions, including a borrower’s credit score and credit history. As we told the authors, the Federal Reserve, the CFPB, and other regulators have been clear that denial disparities in the HMDA data alone cannot be used to assess fair lending. True fair lending examinations include a much richer set of information regarding loans and borrowers.

“We also informed the authors upfront that by limiting their analysis to only “conventional” loans, they would be painting an incomplete picture of the lending environment by purposely excluding mortgages guaranteed by government agencies like the Federal Housing Administration (FHA) that are designed to help borrowers with lower credit scores and small down payments. 

“Reporting such as this, which is not only deeply flawed but clearly biased in its premise, harms the matter at hand because it misrepresents the problems and solutions needed to solve the very serious issues that result in unequal outcomes related to Black homeownership and wealth-building.”

The Markup article, which has been widely disseminated by news outlets, can be found at https://themarkup.org/denied/2021/08/25/the-secret-bias-hidden-in-mortgage-approval-algorithms.