The study was based on nearly 59,000 mortgage applications and more than 198,000 applications for mortgage refinancing across the Chicago area. Applicants, the incomes of which varied from $20,000 to $999,000, pursued loan amounts ranging from $20,000 to $800,000, CreditUnionsOnline.com reports.
“We would expect to see no significant difference in the origination rates for male-headed joint applications and female-headed joint applications, since the backgrounds of both borrowers on joint applications are considered by mortgage lenders,” Spencer Cowan, the vice president of research at Woodstock Institute, said, according to CreditUnionsOnline.com. “The fact that there are such large disparities raises troubling questions about potentially discriminatory underwriting.”
It is difficult, however, to determine if the applications were rejected solely based on their gender. Seventy-seven percent of female purchase mortgage applicants did not list a co-borrower, compared to 52 percent of men who pursued a mortgage without a co-borrower. In the case of refinancing, 71 percent of women applied alone while 32 percent of men applied without a co-borrower.
One possible reason for women’s lower acceptance rate could be that they are paid less than men. A 2011 study from the Institute for Women’s Policy found that women are paid only 82 percent of what men earn in a similar position, and a joint economic report from Congress found that women make $7,600 less than men just after graduation, CreditUnionsOnline.com reports.
Vince Salinas, the vice president of home loans at California-based Patelco Credit Union, said the institution received over 10 percent more applications from women without a co-borrower than male-only applications, adding that last year’s data found the top three reasons for rejection were the same for both genders.
“While we don’t have empirical data on the income of denied applicants, one could theorize that women on the whole make less money than men, therefore it would be more difficult for women to qualify for the same house in the same market as men, even though women have better credit scores,” Salinas said, according to CreditUnionsOnline.com.