Abstract

Excerpted From: Paul Campbell, Mortgage Lending Discrimination: A Barrier in the Land of Opportunity, 28 University of the District of Columbia Law Review 118 (Spring, 2025) (348 Footnotes) (Full Document).

This note discusses the problem of mortgage loan discrimination in America. In January 2021, mortgage rates in America were the lowest in history at 2.65%. Around this time, there was a high demand for housing throughout the country. Yet in 2022, 26% of Black applicants had mortgage applications denied. Mortgage loan discrimination continues to be a barrier for African American homeownership. However, this barrier can be overcome by supporting nonprofit organizations and community banks, creating a new federal agency which provides reparations and guaranteed mortgages, and passing the Fair Access to Financial Services Act.

Part I will discuss the history of discrimination in lending. Part II will provide an overview of the laws governing lending that provide redress and require reporting from lending institutions. Part III will address the Department of Justice's (DOJ) role in combating mortgage lending discrimination. Part IV will discuss the lawsuit history of private and government actors against major lending institutions. Part V offers solutions and recommendations, including a discussion of the vital roles of nonprofit institutions and community banks, providing guaranteed mortgages, and the creation of a Bureau of African American Affairs. Lastly, Part VI, the conclusion, reiterates the need for substantial reforms to overcome mortgage lending discrimination.

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In conclusion, mortgage loan discrimination has been an ongoing problem which requires collective action. All Americans should care about mortgage loan discrimination because these lawsuits have documented how subprime loans devastated cities throughout the country. Mortgage loan discrimination has contributed to the wealth and homeownership gap in America. Hopefully, the DOJ will continue the Combating Redlining Initiative and the revised CRA will increase African American homeownership. Community banking and the support of nonprofits, such as Habitat for Humanity and NACA, provide vital alternatives to major lenders accused of widespread discrimination against African Americans throughout the country. A new federal agency for African Americans would be very impactful, especially if it issued guaranteed mortgages to African American as HUD does for Native Americans. Each of us can do our part to eradicate it by taking steps to raise awareness and supporting entities and reforms that will lead to a better tomorrow.

Paul Campbell graduated from the University of Miami with a B.A. in Political Science. Subsequently, he graduated with honors from the University of the District of Columbia David A. Clarke School of Law. Currently, he is a Lead EEO Specialist with the Department of Treasury and 1LT in the U.S. Army Reserves.