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Fed states that older borrowers face greater barriers to homeownership.

According to a Federal Reserve Bank of Philadelphia report, age is more than just a number. It can also be a barrier to refinancing mortgages. These results are contrary to the belief that older borrowers have more financial stability. Natee Amornsiripanitch is a senior financial economist at Federal Reserve Bank of Philadelphia. He also wrote the report. Amornsiripanitch wrote that age is a significant correlate of mortgage application outcomes. Lenders may consider the applicant’s age when making lending decisions. The analysis revealed that “insufficient collateral” and the “other” reasons for older borrowers being rejected were the two most common reasons. The analysis found that the first reason accounted for between 50% and 70% of all rejections of older borrowers during the underwriting process. This could be because older borrowers are more likely to have mortgage debt beyond retirement. “Amornsiripanitch said that he was surprised by the results of his analysis. “Data shows that older Americans are more financially secure and have higher credit scores than younger people. So I didn’t expect to find rejections being positively correlated to age. You would expect the opposite. The higher mortality rate risk for older borrowers may also play a role in the high rate of rejections. Amornsiripanitch stated that a thorough fair lending analysis of the activities of individual lenders would be required to make such statements. This is beyond the scope and scope of this paper.