“After college in the early 1990′s I was with a mortgage company and for a period of hell, I was the compliance officer in charge of overseeing a HMDA review of every loan mortgage loan over a 3 year period. It sucked. Big time… We did not risk price. Meaning that if you applied the rate was x.xx% that day PERIOD. If you qualified, great. If not, too bad. But we did not tell someone they could have the loan at a higher rate because of their credit or down payment…
That said, there is no doubt in my mind having looked through the credit files of hundreds of borrowers that African Americans in particular got approved at a higher rate. While one could say that we were serving their community better, I argue that we were putting them in greater risk of default, etc… Had we denied these loans, we would have been discriminatory.
It all sucks all around. We should either 100% automate the loan process and not allow for any deviation, or just admit that there will be bias in our lending. We are humans and we are not perfect.”