The secret bias hidden in mortgage-approval algorithms

An investigation by The Markup has found that lenders in 2019 were more likely to deny home loans to people of color than to white people with similar financial characteristics

The new four-bedroom house in Charlotte, North Carolina, was Crystal Marie and Eskias McDaniels’ personal American dream, the reason they had moved to this Southern town from pricey Los Angeles a few years ago. A lush, long lawn, 2,700 square feet of living space, a neighborhood pool and playground for their son, Nazret. All for $375,000. Prequalifying for the mortgage was a breeze. They said they had saved much more than they would need for the down payment, had very good credit — scores of 805 and 725 — and earned roughly six figures each, she in marketing at a utility company and Eskias representing a pharmaceutical company. The monthly mortgage payment was less than they’d paid for rent in Los Angeles for years. They were scheduled to sign the mortgage documents on Aug. 23, 2019 — a Friday — and were so excited to move in they booked movers for the same day.