Hispanics Denied Home Loans

According to Home Mortgage Disclosure Act data, the Hispanic community had a 13 percent rejection rate for home loan applications.

Sales Associate at RE/MAX Real Estate Results Julia Valenciana said that in her 16 years of experience discrimination from a bank has not been a reason for denial. She said banks have a lot of regulations that ensure that they do not discriminate applicants based on race. Instead, she said a lack of education and outreach towards the Hispanic community could be the cause for rejection of a home loan.

“Because they have so much business they just push Hispanics to the side.” Valenciana said about the lack of programs from banks to aid Hispanics.

Valenciana said that many Hispanics are uneducated about the loan application process which makes them think that in order to get approved they have to have more money than is actually necessary.

“First generation Hispanics don’t know how to work their credit,” Valenciana said a cultural difference between the native countries and the United States could also be a reason for the Hispanic denial rate. “They are from Mexico where you have to pay cash for everything.”

Valenciana said that more Hispanics applied for a Federal Housing Administration (FHA) loan than a conventional loan that required an applicant to have a better credit score.

During a 15-minute segment on the Hispanic radio station, La Zeta 95.7 FM, Valenciana said she informs the community about how to improve credit. She encourages the listeners to pay bills in a timely manner, pay credit card expenses and to avoid getting into too much debt.

According to the census bureau, the Hispanic community nationally tends to have more obstacles for home ownership and loans. Valenciana said she did not think this applied to Northwest Arkansas since most Hispanics owned their homes.

“It’s important for us to own our own home.” Valenciana said. “It gives a sense of security.”

During the 2008 economic recession, Valenciana said the Hispanic community did not want to obtain a home loan because they were experiencing an uncertainty with the country, employment and economy.

“I have seen the good, the bad, the ugly, and the good again.” She said.

Valenciana said that things have gotten better since the recession when it was argued that loans were being given to anybody that applied.