New Fair Lending Data released

Posted by on May 13, 2005

[posted from Community Development Banking list]

Below, please find a press release on the report we just released on the new 2004 Home Mortgage Disclosure Act data. We also released a report about a month ago looking at fair lending disparities in every metropolitan area in the country. The reports are on our web site of http://www.ncrc.org.

New Data Confirms Fair Lending Disparities Persist

The National Community Reinvestment Coalition?s (NCRC) recent report looking at HMDA data reveals that fair lending disparities continue to exist for women, minorities and low- to moderate-income individuals. NCRC?s survey included 15 large lending institutions and their affiliates that make up a substantial share of the total lending market. NCRC?s sample includes 4.6 million prime and 649,000 subprime conventional loans.

?Some progress has been made in access to credit,? states John Taylor, president and CEO of NCRC. ?But the disparities are persistent and stubborn and need to go away. Women, minorities and low- to moderate- income individuals should not have to pay more to participate in the American dream of home ownership.?

Minorities, women, and low- and moderate-income borrowers across the United States of America receive a disproportionate amount of high cost loans. Across the country, African-Americans received 18 percent of the conventional subprime loans but only 6 percent of the conventional prime loans during 2004. In contrast, whites received a greater percentage of prime than subprime loans. Whites received 55.3 percent and 66.4 of the subprime and prime loans, respectively.

Disparities are also present by gender. Females received 36.8 percent of the subprime conventional loans but just 28 percent of the prime conventional loans in NCRC?s sample of 2004 loans. Males, in contrast, received a higher percentage of prime loans (67.5 percent) than subprime loans (59.8 percent).

Finally, of all the conventional loans made to low- and moderate-income and middle-income borrowers, between 18 to 21 percent were subprime. In contrast, of all the conventional loans made to upper-income borrowers, just 9.6 percent were subprime. The disparities by income level were among the greatest disparities only to be surpassed by the African-American/white disparity. Of all the conventional loans made to African-Americans, 29.4 percent were subprime. In contrast, of all the conventional loans issued to whites, only 10.3 percent were subprime. Hispanics and Native Americans also received a disproportionate amount of subprime loans. About 15% and 13.6% of the conventional loans made to Hispanics and Native Americans, respectively, were subprime loans.

To receive a copy of the report and/or to schedule a media interview contact Rachel Maleh at 202-464-2717.