HMDA data: more loans, same rejection rates.

Final 1993 HMDA data released Oct. 26 shows that while stepped-up efforts by lenders to attract minorities and low-income borrowers might be working, blacks and Hispanics were still twice as likely to be turned down as whites or Asians. The final HMDA data hardly differs from the preliminary data released by the Federal Financial Institutions Examination Council in August. It shows that wide differences in denial rates among racial groups persist. Denial rates for all applicants were slightly lower in 1993 than in 1992 and the percentage of loans made to all increased over 1992 figures. However, even though the volume of loans given to blacks surged, 43.9% from 1992, they were still denied at almost the same rate34% in 1993 vs. 35.9% in 1992. This means that simply churning out more loans by itself will not absolve lenders of discrimination charges. Among the other categories, 25% of those by Hispanics rejected and only 15% of loan applications by whites were denied. This could indicate that while marketing programs to reach minorities and low- income borrowers may have succeeded, efforts to limit the relative differences between the races did not. I'm not shocked [at the numbers], said Allen Fishbein, general counsel and director of Neighborhood Revitalization Project, Centers for Community Change. The problem [of discrimination] wont lend itself to a quick fix. It took years to build up and will take years to break down. Like politics, mortgage lending is really local, he added. As interesting as the aggregate data is, when you break it down and compare local lenders, it really gets interesting. The final report demonstrated that more people are borrowing than last year28% more, and the greatest increase is in percentage of loans made to blacks, Hispanics and borrowers in low-income groups. The number of loans among racial or ethnic groups increased 36% for black applicants, 25% for Hispanic applicants, 18% for white applicants and 7% for Indian and for Asian borrowers. From 1992 to 1993, the number of conventional loans extended to lower-income households increased 38%, compared with 8% for loans to the highest-income households. Warren Lasko, executive vice president of the Mortgage Bankers Association, said in a statement Oct. 26 that the MBA was encouraged the number of loans made to black, Hispanic and lower-income households increased dramatically in 1993, noting that those loans had far exceeded the increase in loans made to white households. But in acknowledging that refusal rates for minority applicants still remained twice as high as whites, Bob OToole, MBA senior staff vice president, said the group would be studying the data. At press time, the group had yet to receive the tapes from FFIEC. The report reflects lending activity for approximately 9,650 institutions covered by the HMDA that reported data to member agencies of the FFIECOCC, FDIC, OTS, NCUA,the Fed and HUD. The reports include individual disclosure statements and aggregate data for all lending institutions that reported 1993 data for a given MSA. HMDA data is available in various formats, including paper, magnetic tape, PC diskette and CD-ROM. For an order form call (202) 452- 2016.