New Report Reveals Systematic Mortgage Discrimination, and the Federal Rollbacks Making It Harder to Fight Back
One of North Carolina’s largest banks has been systematically undermining the ability of Black, Latino, and Asian households to buy homes and build wealth, according to a new report.
Americans for Financial Reform, a progressive nonprofit organization, analyzed 24,600 conventional home purchase mortgages issued by Wells Fargo in North Carolina between 2020 and 2024. The analysis found that denial rates for Black and Latino homebuyers increased by roughly 20% for both groups over the time frame, with 25.6% of Black and 29.8% of Latino mortgage applicants being rejected.
Black and Latino applicants who received mortgages from Wells Fargo were also charged higher interest rates than their white counterparts, according to the study. Those disparities persisted across income brackets as well.
The study was published at a time when housing stability is becoming a growing issue for many households across the Tar Heel State. Nearly half of renters in the state spend more than the recommended 30% of their income on housing and utility costs, which means they meet the federal definition of being “rent burdened.”
Similarly, the National Low Income Housing Coalition found that North Carolina has a shortage of more than 215,000 homes for the state’s lowest-income earners. In all, there are just 38 available homes for every 100 renter households earning up to $25,000 per year.
“Housing is not a privilege for some — it’s a basic need,” Bishop Herbert Reynolds Davis, chairman of the board of directors of NC United Power for Action, said in a statement. “When race decides who gets access, it goes against our deepest moral beliefs.”
Invisible People reached out to Wells Fargo for a comment about the report’s findings, but did not hear back by press time.
Why Mortgage Access Matters for Housing Stability
The link between mortgage borrowing and poverty and homelessness may seem disparate, but there are a couple of key connections. Mortgages can give homeowners more financial options to address housing instability than renters. For instance, someone with a mortgage can borrow money against their home’s value to pay for monthly expenses. A renter may have to get a personal loan for the same expenses, which are often accompanied by a higher interest rate.
Homeownership can also help a household lock in monthly housing expenses. Mortgages typically don’t increase unless there are significant increases to homeowner’s insurance premiums, property taxes, or escrow account expenses.
On the other hand, renters are often at the mercy of their landlords when it comes to their monthly housing expenses, especially in landlord-friendly states like North Carolina, where landlords only need to give 30 days’ notice before increasing rent.
All these factors contribute in part to North Carolina’s growing cost-of-living crisis. According to a recent report from The News & Observer, about 30% of North Carolina households struggle to make ends meet each month as the cost of electricity, natural gas, and food prices continue to climb.
Danielle Olivas, a Wells Fargo teller, said the bank’s actions have a much deeper impact than simply telling someone they don’t qualify for a loan.
“These are my people being denied the opportunity to own a home, to build generational wealth, to leave a legacy to their families — and at two to three times the rate of their white counterparts with the same income, that doesn’t feel like an accident. That feels like redlining,” Olivas said.
Federal Rollbacks Are Making It Harder to Fight Back
Meanwhile, it is also becoming more difficult for everyday Americans to hold banks like Wells Fargo accountable for racially discriminatory behavior.
The Trump administration has rolled back civil rights and fair housing protections for renters across the federal government, including the firing of multiple attorneys within the Department of Housing and Urban Development. A recent analysis by NPR found that more than 70% of the Department of Justice’s civil rights lawyers have left the federal government during the second Trump administration.
“The Trump Administration should be strictly enforcing our fair lending and consumer protection laws, so everyone has a fair shot at buying a home or starting a small business instead of rolling back safeguards that protect borrowers from discrimination,” Sen. Elizabeth Warren (D-MA) said in a statement.
To Ericka Taylor, co-executive director of the Americans for Financial Reform Education Fund, the issues highlighted in the report also illustrate many of the challenges North Carolina households have to face in the future.
“Wells Fargo’s pattern of under-serving people and communities of color and its high rejection rates of Black and Latine mortgage applicants is especially troubling as the administration rolls back civil rights and fair lending enforcement,” Taylor said.
“And the bank’s record of racial disparities in its home purchase lending not only undermines people’s ability to build wealth and invest in their families’ futures, but it also perpetuates the yawning racial wealth gap that is an injustice for these families and for all of us,” she added.
How You Can Help
Now is not the time to be silent about homelessness in the U.S. or anywhere else. Unhoused people deserve safe and sanitary housing just as much as those who can afford rent or a mortgage.
Poverty and homelessness are both policy choices, not personal failures. That’s why we need you to contact your officials and tell them you support legislation that:
- Streamlines the development of affordable housing
- Reduces barriers for people experiencing homelessness to enter permanent housing
- Bolsters government response to homelessness
Together, we can end homelessness.
