Navy Federal Credit Union is facing backlash after a blockbuster report shows Black mortgage applicants have been significantly denied compared to their counterparts.
The nation’s largest federal credit union, headquartered in Vienna, Virginia, serves as a bank for members of the armed forces, including veterans and their families. According to an analysis by CNN, Navy Federal approved over 75 percent of conventional home mortgage loan applications for white borrowers in 2022.
However, for Black borrowers, the approval rate was about 48 percent. It underscores the reality of racial disparities in homeownership across the U.S.
Navy Federal denied the findings in CNN’s report in a statement on Friday, Dec. 15.
“Navy Federal Credit Union was recently included in a news story about lending practices in the mortgage industry,” the statement said. “We care deeply about this issue and want you to know the report does not accurately reflect our lending practices and is rooted in an incomplete analysis of lending data that does not account for major criteria required by a financial institution to approve a mortgage loan.”
It continued: “We proudly provide a higher percentage of mortgage loans to Black applicants than the vast majority of the top 50 mortgage originators nationwide. Our members put their faith in us to do right by them financially, and we stand by the promise that we are abiding by all fair lending practices. “
Bob Otondi, a Black man whose relatives were service members, told CNN that he applied for a mortgage loan at Navy Federal in the summer of 2021 but was rejected. It was his “American dream” to purchase the Dallas, Texas, residence with three bedrooms, a big yard, and a pool for his family.
“I thought it could have been racial discrimination,” said the business owner from Kenya, per the outlet. “But I could never prove it.
Days later, Otondi was approved by another lender, which left him confused, according to the report. His realtor, Angela Crescini, questioned why his application was shot down.
“How can one lender get a loan done within 15 days and this other one couldn’t at all? It didn’t ring right to me,” Crescini said.
CNN reported that an estimated 3,700 mortgage applications for Black borrowers were blocked by Navy Federal in 2022. Experts told the outlet that the gaps were “some of the largest” and alarming.”
“It does surprise me that they’re doing significantly worse than other big lenders,” UCLA professor Jose Loya said.