WASHINGTON - The number of home loans made to Asians and Hispanics rose modestly last year, but loans to whites, blacks, and Native Americans dropped slightly, the government reported Thursday.

Overall lending rates slowed considerably from 1999, when double-digit growth occurred in all minority categories, according to the annual Federal Financial Institutions Examination Council report.

Loans to Asians last year increased by 8%, to 168,443, and loans to Hispanics by 7%, to 374,314.

Lending to whites suffered the biggest decline, falling 6%, to 3.2 million. The number of loans to Native Americans fell 5%, to 24,914, and loans to African-Americans dropped by 1%, to 306,672.

Applications for all home loans, including home-improvement and refinancings, fell 16%, mostly because of a decline in refinancing activity, the report said.

The modest gains for minorities in home lending are "a recognition of where we're at in the economy," said James Ballentine, community development director for the American Bankers Association. "In mid-2000 and into 2001, the economy has really slowed, and that is reflected in the number of people purchasing homes. We'll see those numbers increase slightly when the economy improves and if the Fed continues to cut interest rates."

David L. Littmann, senior vice president and chief economist at Comerica Inc. of Detroit, said the number of applications fell from a year earlier because interest rates "kept escalating until May, when they reached a peak" before the Federal Reserve began cutting rates early this year. "It's really a reflection of rates becoming more and more unaffordable."

Hispanics got 14% more conventional loans last year than the year before; Asians, 10% more; and blacks, 1% more. By comparison, conventional home mortgages to whites and Native Americans each dropped 5%.

Also, the rejection rate fell for the second consecutive year, though modestly, to 27% from 28%. Denial rates for each ethnic group, except Asians, also dropped last year, but they remained significantly higher for some groups than for others.

For instance, 45% of black loan applicants were rejected, compared with 49% in 1999, and 31% of Hispanic applicants were denied, down from 35%. Twenty-two percent of white applicants were rejected last year, compared with 25% in 1999. Among Asians, denials rose slightly, to 12%.

The data were collected by the council, the umbrella group of bank and thrift regulators, from 7,713 banks, thrifts, credit unions, and mortgage companies subject to the Home Mortgage Disclosure Act.

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