In an exclusive analysis of federal data, FairPlay reveals the fairest mortgage lenders and fairest cities in the U.S.

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Dec 28, 2022, 09:03 ET

Despite improvements in mortgage fairness in 2021, protected classes continue to see inequities in key regions

LOS ANGELES, Dec. 28, 2022 /PRNewswire/ -- For the second consecutive year, FairPlay is releasing research evaluating publicly available data to identify the fairest cities and fairest lenders in the United States. The data analyzes loan records from 2021 for four protected groups including Black, Native American, Hispanic, and female borrowers. To determine fairness, FairPlay data scientists calculated the Adverse Impact Ratio (AIR) for each of the four protected classes across the top 20 Metropolitan Statistical Areas and the country's largest lenders. The analysis shows that mortgage fairness increased for the protected classes in 2021, but regional inequalities persist, particularly for Black and Native American borrowers.

FairPlay, the world's first Fairness-as-a-Service™ solution, conducted a comprehensive study of more than 23 million mortgage applications from 2021. The loan records were obtained from Federal public source data in the Home Mortgage Disclosure Act (HMDA). This is the most comprehensive publicly available data source that identifies race, ethnicity and gender for mortgage applications.

"In this analysis, we've identified lenders who are successfully underwriting applicants from historically disadvantaged groups, to give more people a fair shot at achieving the American Dream," said FairPlay founder and CEO Kareem Saleh.

Key findings from the research include:

Native American applicants: In 2021, Native American homebuyers were approved for mortgages at 81.9% the rate of White homebuyers. They experienced the lowest approval rates for mortgages in the Southwest, particularly in Arizona and New Mexico.
The Top 10 Fairest Cities for Native American Homebuyers are:
○     Miami
○     San Francisco
○     Seattle
○     Boston
○     Minneapolis
○     San Diego
○     Las Vegas
○     Detroit
○     Fort Worth
○     Los Angeles
The Top 10 Fairest Lenders for Native American Homebuyers are:
○     Primary Residential Mortgage
○     Huntington National Bank
○     Paramount Residential Mortgage
○     Prosperity Home Mortgage
○     Home Point Financial
○     Union Home Mortgage
○     Lakeview Loan Servicing
○     Caliber Home Loans
○     Loandepot.com
○     Cornerstone Home Lending
Black applicants: In 2021, Black homebuyers were approved for mortgages at 84.4% the rate of White homebuyers—the highest rate ever. Black homebuyers experience the lowest approval rates for mortgages in the South and the Midwest, as well as in rural areas.
The Top 10 Fairest Cities for Black Homebuyers are:
○     San Diego
○     Portland
○     Seattle
○     San Francisco
○     Tampa
○     Denver
○     Miami
○     New York
○     Minneapolis
○     Phoenix
The Top 10 Fairest Lenders for Black Homebuyers are:
○     Gateway First Bank
○     Lakeview Loan Servicing
○     Planet Home Lending
○     Bank of America
○     Community Bank
○     Movement Mortgage
○     Rocket Mortgage
○     Nationstar Mortgage
○     Guild Mortgage
○     Primelending
Hispanic applicants: In 2021, Hispanic homebuyers are approved for mortgages at 88.7% the rate of White homebuyers. Hispanic homebuyers experienced the lowest mortgage approval rates in rural areas.
The Top 10 Fairest Cities for Hispanic Homebuyers are:
○     Denver
○     Minneapolis
○     Seattle
○     Dallas
○     Portland
○     Chicago
○     San Diego
○     San Francisco
○     Washington, D.C.
○     Boston
The Top 10 Fairest Lenders for Hispanic Homebuyers are:
○     Lakeview Loan Servicing
○     Gateway First Bank
○     Huntington National Bank
○     Cardinal Financial
○     Homebridge Financial Services
○     Academy Mortgage
○     Loandepot.com
○     Guild Mortgage
○     Movement Mortgage
○     CMG Mortgage
Female applicants: In 2021, female homebuyers were approved for mortgages at 99.2% the rate of male homebuyers—the highest rate ever and approaching parity.
The Top 10 Fairest Cities for Female Homebuyers are:
○     New York
○     Seattle
○     Boston
○     Portland
○     San Francisco
○     San Diego
○     Los Angeles
○     Minneapolis
○     Miami
○     Denver
The Top 10 Fairest Lenders for Female Homebuyers are:
○     Bank of America
○     Fifth Third Bank
○     Wells Fargo Bank
○     Truist Bank
○     Guaranteed Rate Affinity
○     JPMorgan Chase Bank
○     Finance of America Mortgage
○     US Bank
○     Guaranteed Rate
○     Community Bank

Fairplay used the industry standard metric Adverse Impact Ratio (AIR), which compares the rate of approval for protected status applicants compared to a control group (typically White or male applicants). For example, if protected class applicants had a 60% approval rate, while the control group had a 90% approval rate, the AIR would be 60/90 or 67%. An AIR of less than 80% is considered a statistically significant disparity. AIR does not control for risk.

For more information about the 2021 Fairest Lenders and Fairest Cities or to view additional research materials, visit FairPlay.ai.

About FairPlay AI

FairPlay AI is the world's first "fairness-as-a-service" solution helping organizations address algorithmic bias to find more good applicants that primary models miss — all without increasing risk. Built by some of world's foreknown leaders in AI, FairPlay's technology serves financial institutions, lenders, insurance carriers, marketers and others, identifying blind spots in their algorithms and providing automated "second-looks" to improve decisioning systems. FairPlay's tools help lenders identify more good loans and increase the fairness of their portfolios, resulting in higher profits and fairer portfolios all without higher risk. For more information about FairPlay and its products, visit FairPlay.ai.

SOURCE Fairplay