Rejection rates for African-American and Native American mortgage borrowers set new records last year, increasing slightly, to 54% and 53%, respectively, according to government data released Thursday.

By comparison, white applicants were rejected 26% of the time, also up slightly from 1997, though rejection rates for Asian borrowers dipped to 12%.

Mortgage lending to all members of minority groups except African- Americans grew at a double-digit pace last year.

The number of loans made to Native Americans jumped 21%. Asians and whites each got 13% more loans, and lending to African-Americans increased 9%.

Mortgage lending was up 19% for low-income borrowers, defined as those earning less than 80% of the median family income in their census area.

"The industry is reaching out more every year to all communities," a spokeswoman for the American Bankers Association said.

The data were collected from 7,837 institutions subject to the Home Mortgage Disclosure Act. A report is compiled and released annually by the Federal Financial Institutions Examination Council, the umbrella group of banking and thrift regulators.

Last year's data cover 24.7 million loans and applications, a 50% increase that resulted mostly from a surge in refinancings.

High rejection rates may indicate lenders' community outreach programs are attracting new prospects.

"More people feel they have a chance," said John Gamboa, executive director of the Greenlining Institute, a consumer advocacy group in San Francisco. "They have raised the expectations, so many people on the cusp, or who do not qualify, apply."

Reporting separate data collected under the Community Reinvestment Act, the examination council said 1,866 banks and thrifts made 2.6 million small-business loans, an increase of less than 1%. These loans totaled $161.3 billion, up 1.21%.

There were 2.4% fewer small-farm loans, at 208,000. Yet the dollar total of small-farm lending was up 2.3%, to $11.5 billion.

Measured by number of loans, the council said 58% of the small-business loans and 91% of the small-farm loans were to borrowers with $1 million or less of revenues.

Community development lending dropped 13% in 1998, to $16 billion, the council said.

The decline shows "maybe not everybody is sharing in that robust economy or maybe the financial institutions are slowing down in the CRA outreach," Mr. Gamboa said.

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