Analyzing the Intersection: Diversity's Impact on Mortgage Origination Rates among Minority and White Populations While Controlling for Income and Unemployment – A case study of Navy Federal Credit Union and Its Peers.

Volstorff A

This paper critically examines the relationship between neighborhood diversity and mortgage origination rates, focusing on minority and white populations while accounting for income and unemployment variables. Specifically, it employs a case study approach, analyzing Navy Federal Credit Union and its peers to understand how diversity, as measured by the ESRI Diversity Index, impacts mortgage lending practices. Amidst ongoing concerns of redlining and its modern-day manifestations, particularly in Black and Hispanic neighborhoods, the study delves into the persisting disparities in mortgage lending. Legal allegations against various lenders for discriminatory practices set the stage for this investigation. Utilizing publicly available Home Mortgage Disclosure Act (HMDA) data, the research explores whether higher diversity within neighborhoods correlates with lower mortgage origination rates for minorities. This analysis is essential in understanding the implications of racial and ethnic diversity in lending decisions, with a focus on the practices of Navy Federal Credit Union and its counterparts. The paper aims to contribute to academic and practical discourses on racial disparities in mortgage lending by offering insights and recommendations that promote equitable practices. This case study approach not only underscores the need for data-driven analysis in uncovering systemic issues but also highlights the role of major financial institutions like Navy Federal Credit Union in shaping equitable lending landscapes.