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The following nationwide summary statistics are based on data compiled by the Federal Financial Institutions Examination Council (FFIEC) for institutions covered by the Home Mortgage Disclosure Act.1
For 2000, the FFIEC prepared 52,776 disclosure statements for 7,713 lenders, with a separate statement for each metropolitan area in which a lender has an office or is deemed to have one under Regulation C (table 1). The data reflect the lending activity of 4,033 commercial banks; 696 savings associations; 1,694 credit unions; and 1,290 mortgage companies, of which 1,009 were independent entities.
Applications Received and Loans Made
In 2000, lenders covered by HMDA reported a total of 19 million loans and applications. The 2000 data show that lenders acted on approximately 17 million applications for home purchase loans, home improvement loans, and refinancings (compared with approximately 20 million in 1999), and they purchased about 2 million loans (compared with 3 million in 1999). The total volume of reported home loan applications and purchases decreased in 2000 by 16 percent from 1999, primarily due to a significant decline in refinancing activity (table 1). The number of applications for home purchase loans also fell from 1999 levels in 2000, but by a more modest 2 percent.
Loan Programs and Changes in Lending Volume by Race and Income
Lending institutions tend to specialize in different types of home loans. For example, among home purchase loan originations, mortgage companies tend to do most of the government-backed lending, including FHA and VA loans. Commercial banks, on the other hand, do most of the home improvement and multifamily lending.
Applications for different types of home purchase loans vary across racial and ethnic groups and income categories (table 2). For example, in 2000, 31 percent of Hispanic applicants and 27 percent of black applicants for home purchase loans sought government-backed mortgages; the comparable rate for whites and Native Americans was 14 percent, and for Asians was 9 percent. Moreover, 25 percent of home purchase loan applicants with incomes less than 80 percent of the median family income for their metropolitan statistical areas (MSAs) applied for government-backed loans; by contrast, 9 percent of applicants with incomes of at least 120 percent of the MSA median applied for such loan.
Taking conventional and government-backed home purchase lending together, lending to Asians and Hispanics was up about 8 percent and 7 percent, respectively from 1999 to 2000 (table 7). During the same period, lending to whites, Native Americans blacks, fell 6 percent, 5 percent, and 1 percent, respectively.
From 1993 to 1999, the number of home purchase loans extended to low- and moderate-income applicants (with incomes less than 80 percent of the MSA median) increased more than for higher income applicants (with incomes at least 120 percent of the MSA median). In 2000, however, the number of such loans extended to low- and moderate-income applicants decreased by 4 percent, while loans extended to higher income applicants rose by 3 percent from 1999 to 2000 (table 7).
Conventional home purchase lending decreased in 2000 for some racial and ethnic groups, and increased for others, when compared with 1999 lending. The number of conventional home purchase loans made to Native Americans and whites decreased 5 percent for each group, while such loans made to Hispanics, Asians, and blacks rose by 14 percent, 10 percent, and 1 percent, respectively (table 5).
During 1999-2000, the number of conventional home purchase loans extended to low- moderate-, and middle-income applicants decreased by modest amounts, and rose slightly for upper income applicants. Applicants with incomes less than 80 percent of the metropolitan area median experienced a decrease in home purchase loan originations of 2 percent; applicants with incomes 80-99 and 100-119 of the median experienced decreases of 1 percent and 0.2 percent, respectively. For the highest income group (120 percent or more of the median), the number of conventional home purchase loans increased by 4.4 percent.
A significant minority of home purchase loan applications in 2000 was for government-backed loans (table 6). The number of government-backed home purchase loans extended to all racial groups declined from 1999 to 2000. In 2000, the number of these loans made to whites decreased by 13 percent; to Asians, 7 percent; to blacks, 4 percent; and to Native Americans and Hispanics, by 1 percent.
Similarly, the number of government-backed loans decreased for individuals in all income categories from 1999 to 2000. Loans extended to applicants with incomes 80 percent or less of the MSA median decreased 9 percent; to applicants with incomes 80-99 percent of the median, 7 percent; to applicants with incomes 100-119 percent of the median, 7 percent; and to applicants with incomes 120 percent or more of the median, 5 percent (table 6).
From 1993 to 1998, the overall denial rate for conventional home purchase loans increased, from 17 percent to 29 percent. In 1999 and in 2000, however, the overall denial rate for conventional home purchase loans fell slightly. In 1999, the denial rate for these loans was 28 percent; in 2000, the rate fell to 27 percent.
Denial rates for these loans continue to vary among applicants, by racial or ethnic characteristics and by income (table 3). In 2000, 45 percent of black applicants, 42 percent of Native American applicants, 31 percent of Hispanic applicants, 22 percent of white applicants, and 12 percent of Asian applicants were denied conventional home purchase loans (table 3). These rates of loan denial were lower than in 1999 for each group except Asians, for whom denial rates rose slightly. Denial rates for conventional home purchase loans in 1999 were 49 percent for blacks, 35 for Hispanics, and 25 percent for whites. The comparable rate in 1999 for Native Americans was only marginally higher than in 2000.
Denial rates for conventional home purchase loans also vary according to applicants' income levels. In 2000, as in 1999, the denial rate for conventional home purchase loans for low-income applicants was 43 percent; for moderate-income applicants, the rate decreased slightly, from 28 percent to 27 percent. For higher-income applicants the denial rate for these same loans was slightly more than 10 percent in 2000, up only marginally from 1999.
Differences in the income levels of the racial or ethnic groups accounted for some of the differences among them in denial rates during 2000. However, other factors are more important given that for all but the lowest-income group, white and Asian applicants experienced lower rates of denial than Native American, black, or Hispanic applicants (table 4). For applicants with incomes less than 50 percent of the median, white applicants experienced a slightly higher denial rate (38 percent) than Native Americans (37 percent). The HMDA data include many lenders' cited reasons for denial; in 2000, as in prior years, the reason most frequently cited for the denial of a single-family home loan application, regardless of the applicant's race or ethnic status, was poor or no credit history.
Missing Information on Race and Ethnicity
Under HMDA, for applications taken entirely by telephone a lender is not required to collect information on an applicant's race or ethnicity, and gender. For applications taken by mail or electronic means (such as by facsimile or the internet), a lender must request the information, but an applicant is not required to provide it.
The incidence of applications and loans reported without data on race or ethnicity has grown since 1993. From 1993 to 2000,01/15/2009 11:04 AMth missing race or ethnicity data increased from about 8 percent to about 28 percent (table 8).2 For home purchase loans, the proportion of applications missing race or ethnicity data is lower but still has grown substantially. In 1993, about 4 percent of the home purchase loan applications were missing race or ethnicity data; by 2000, the proportion was about 15 percent, and involved roughly 1 million applications. For home purchase loans originated, 11 percent lacked race or ethnicity data in 2000, up from 3 percent in 1993.
The increase in applications missing data on race and ethnicity is due in part to increased proportion of all home purchase loan applications reported by institutions specializing in manufactured home lending. These institutions frequently use indirect methods for soliciting applications, which are frequently missing race and ethnicity data. For example, preliminary estimates for 2000 suggest that nearly 30 percent of the conventional home purchase loan applications filed by lenders specializing in manufactured home lending did not include race or ethnicity data. With respect to the increase in such applications from 1993 to 2000, preliminary estimates suggest that roughly 30 percent of the increase is attributable to lenders specializing in manufactured home lending.
1. The FFIEC has also compiled insurance data submitted by seven major private mortgage insurance (PMI) companies under the auspices of the Mortgage Insurance Companies of America. These data, which relate to application decisions made by the PMI companies during 2000, show 1.6 million applications for private mortgage insurance (1.3 million for home purchase loans, 0.3 million for refinancings). The data are available from the individual companies, and-in the same formats as the HMDA data-at the central depositories and from the FFIEC.
2. Based on whether information was missing for the first listed applicant.