Since the release last fall of the Home Mortgage Data Act figures that showed apparent bias against minorities in mortgage lending, a central aspect of the ensuing debate has been whether the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation are to blame because of their underwriting guidelines. Ann B. Schnare, senior vice president and director of ICF Inc. and manager of the firm's Housing and Real Estate Group, commented on a paper presented at Fannie Mae's recent annual housing conferences that examined the issue. The paper was presented by Glenn B. Canner, senior economist in the Division of Research and Economics at the Federal Reserve Board, and Stuart A. Gabriel, associate professor of finance and business economics at Stanford University. Following are excerpts of her comments. Additional excerpts will appear in the June 15 issue of The Mortgage Marketplace.

Canner and Gabriel document what community groups have been claiming for a relatively long time - namely, that loan applications are less likely to be accepted if the applicant is a member of a minority group or if the property is located in a minority neighborhood. While the data do not make it possible to control for a number of important factors - most notably, the applicant's wealth and credit rating - the findings are, at least, highly provocative.

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