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Mortgage Discrimination: What to Do If It Happens to You

While the predatory lending practices that fueled the 2008 Housing Crisis may be gone, today mortgage loan discrimination is subtler and just as costly.

Georgia Rose
Dawnielle Robinson-Walker
Updated
It’s hard enough to buy a home without someone gaming the system against you. Although the predatory and discriminatory lending practices that fueled the 2008 housing crisis have since been forbidden under the Dodd-Frank Act, today mortgage discrimination is subtler, more insidious — and perhaps just as costly.

Tight lending standards leave minorities with fewer options

After the housing collapse in 2008, a tight credit environment reduced the number of mortgage loans issued to potential homeowners with less-than-perfect credit, especially minorities. Research conducted by the Urban Institute in 2014 found a drop of as many as 4 million loans between 2009 and 2013 could be attributed to tightening credit, with African-American and Hispanic borrowers disproportionately affected.
Even now that some lending restrictions have been eased, a credit gap persists nationwide. In 2024, the Federal Reserve Bank of Minneapolis reported credit history as the top reason for denials among Black applicants — a group that is 11.6% more likely to be denied due to credit history, compared to White borrowers with similar applications.

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Interest rate discrimination remains a concern

The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB) — a government agency that works to protect borrowers from abusive and unfair lending practices. But despite the CFPB’s intention, interest rate discrimination prevails.
A 2021 study from the Joint Center for Housing Studies at Harvard University found that high-income Black applicants received higher interest rates than low-income White applicants — the median interest rate for Black homeowners earning between $75,000 and $100,000 was 4.215 percent, while the median rate for White homeowners earning up to $30,000 was 4.16 percent. The disparity is even greater when comparing high-income homeowners across both groups. The median interest rate for Black homeowners earning $100,000 or more was 4.169 percent, but for high-earning White homeowners, the median rate was 3.949 percent.
Disparities appeared to lessen between 2023 and 2024, with Black and Hispanic borrowers securing slightly lower median rates than White applicants, according to the Federal Reserve Bank of St. Louis.
However, executive orders issued in late 2025, such as “Promoting Access to Mortgage Credit” and “Removing Regulatory Barriers to Affordable Home Construction,” have some civil rights groups concerned. They argue that reduced regulatory requirements could provide cover for harmful practices and undo the progress seen in recent years.

Redlining may be illegal, but it still persists

In many cases, mortgage discrimination surfaces not only in the form of higher costs but also by barring access to a mortgage through redlining — the practice of excluding Black and Hispanic consumers from mortgage lending services based on where they live. Redlining was made illegal in 1968 through the Fair Housing Act, but persists regardless.
In 2021, the Department of Justice (DOJ) launched the Combating Redlining Initiative, which has targeted multiple lenders engaging in redlining and secured over $153 million in relief for affected communities.
For example, in 2024, Fairway Independent Mortgage Corporation paid more than $9 million to resolve allegations of redlining Black neighborhoods. And in 2025, the CFPB and DOJ took action against Draper & Kramer Mortgage Corporation and The Mortgage Firm for similar practices in Boston and Chicago.
In 2023, the DOJ and CFPB sued Colony Ridge, a Texas-based lender, for a related practice known as “reverse redlining” in Hispanic neighborhoods. This is the process of seeking out vulnerable consumers to push expensive, risky loans.

What you can do if mortgage discrimination happens to you

First, know your rights. The Fair Housing Act and Equal Credit Opportunity Act make it unlawful to discriminate in the rental or sale of housing based on national origin, race, color, religion, sex, familial status, age, or source of income, including public assistance. To avoid mortgage discrimination, potential borrowers should shop multiple lenders. Not only will that help you find the best mortgage interest rate, but it could also identify lenders that are discriminating with higher rates or outright denial. Slight differences in rates from one lender to the next — a quarter point or so here or there — are to be expected. But if one lender quotes a rate that seems way off base — or declines your application altogether when others didn't — you may want to raise a flag.
If you suspect discrimination, contact your state attorney general's office and file a complaint with the CFPB and the Department of Housing and Urban Development. You may also want to consider retaining a local attorney to help navigate the process.
Knowing what mortgage discrimination is — and refusing to let it continue — can help your family and generations to come live in the homes and neighborhoods they deserve.
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