Can Digital Mortgage Platforms Make the Lending Process Less Racist?
The bias around homeownership in the United States — qualifying for a loan (while Black), Black neighborhoods being undervalued, gentrification pushing Black and Brown people out of once-affordable areas — has been a talking point recently as many examine the inequities facing BIPOC. One solution to reduce discrimination faced by prospective Black buyers comes via making the experience as digital as possible and handing the process over to mortgage websites/apps and away from traditional lenders.
“Discrimination is definitely falling, and it corresponds to the rise in competition between fintech lenders and regular lenders,” Nancy Wallace, chair in real estate capital markets at Berkeley’s Haas School of Business, told the New York Times.
A 2019 study co-authored by Wallace found that the algorithms used by digital mortgage platforms discriminated 40% less than a human lender. It also found that there was no discrimination when it came to blanket acceptances and rejections.
