Wells Fargo’s Black approval rate improves, but racial gap persists

According to the HMDA data, the number of Black refi applicants at Wells Fargo nearly doubled in 2021 compared with the year before. Approximately 24,000 Black homeowners completed applications, accounting for 7% of the bank’s total refi applicants, up from 5% in 2020 – both are higher than the industry averages of 5% in 2021 and 3% in 2020.

However, it still lags behind its major competitors regarding approval rates for Black borrowers.  JPMorgan Chase & Co. accepted 87% of Black applicants compared with 93% of White applicants; Rocket Mortgage approved 81% of Black applicants compared with 88% of White applicants, and Bank of America accepted 75% of Black applicants compared with 86% of White applicants.

Read more: Black mortgage discrimination – applicants denied at alarming rate

Bloomberg, citing housing experts on racial disparities, reported that underwriting algorithms and a systemic undervaluation of homes in predominantly Black neighborhoods play a part in a modern-day redlining.

“We’re seeing these COVID responses do what we saw the Great Recession’s response did, which is to leave behind the very communities which were hardest hit by that crisis,” Nikitra Bailey, senior vice president of public policy at the National Fair Housing Alliance, told Bloomberg.