Tables are in Portable Document Format (PDF).
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 2001, the FFIEC prepared 53,066 disclosure statements
for 7,631 lenders, with a separate statement for each metropolitan area
in which a lender has an office or had a sufficient number of applications
and loans to be deemed to have an office under Regulation C (Table
1). The data reflect the lending activity of 3,998 commercial banks;
685 savings associations; 1,715 credit unions; and 1,233 mortgage companies
(972 were independent mortgage companies).
Applications Received and Loans Made
In 2001, lenders covered by HMDA reported a total of about 28 million loans and applications. The 2001 data show that lenders acted on approximately 24 million applications for home purchase loans, home improvement loans, and refinancings (compared with approximately 17 million in 2000), and they purchased about 4 million loans (compared with 2 million in 2000). The number of applications for home purchase loans increased from 2000 levels in 2001 by 3 percent.
The total volume of reported home loan applications and purchases increased in 2001 by 44 percent from 2000, primarily due to a significant increase (119 percent) in refinancing activity (Table 1). Requests for refinancings accounted for 60 percent of all home loan applications (data not shown in tables). This proportion is substantially higher than in 2000, when applications for refinancings accounted for about 39 percent of all applications. The increased volume and share of applications for refinancings is the consequence primarily of a sharp drop in interest rates on mortgage loans.
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. Depository institutions, particularly commercial banks, do most of the home improvement and multifamily lending. Both commercial banks and savings and loan associations do substantial volumes of 1- to 4-family home purchase lending and refinancings.
Applications for different types of home purchase loans vary across racial and ethnic groups and income categories (Table 2). For example, in 2001, 32 percent of Hispanic applicants and 29 percent of black applicants for home purchase loans sought government-backed mortgages; the comparable rates for whites and Native Americans were 16 and 15 percent, respectively. The rate for Asians was 8 percent. Moreover, 27 percent of home purchase loan applicants with incomes less than 80 percent of the median family income for their metropolitan areas applied for government-backed loans; by contrast, 9 percent of applicants with incomes of at least 120 percent of the metropolitan area median applied for such loans (derived from Table 2, government-backed memo item).
The greater reliance of lower-income households on government-backed loans reflects several factors. Dollar limits on the amount of FHA loan insurance or VA loan guarantees make these government-backed loans unavailable or less attractive to households seeking to buy more expensive properties. Also, the low downpayment requirements and ability to finance closing costs make FHA and VA loans particularly attractive to lower-income households and first-time homebuyers, who are likely to have fewer financial resources than other homebuyers do.
Taking conventional and government-backed home purchase lending together, lending to Hispanics and Asians was up about 8 percent and 4 percent, respectively, from 2000 to 2001; lending to whites rose 1 percent from 2000 to 2001 (Table 7). During the same period, lending to blacks fell 7 percent. Lending to Native Americans declined by 39 percent from 2000 to 2001; virtually all of the decline in lending to Native Americans, however, can be attributed to overreporting of the number of loans to Native Americans in 2000. Overreporting of lending to Native Americans may have existed in the years immediately preceding 2000 as well. The overreporting in 2000 appears to have involved only a few lenders and a relatively small number of loans; but, because the volume of lending to Native Americans is not large, compared with the overall home purchase lending market, the resulting changes appear large in percentage terms.
Home purchase lending increased modestly for all income categories from 2000 to 2001. Moderate- and middle-income households experienced the greatest expansion, 3 percent and 4 percent, respectively; over the same period, home purchase lending increased by 2 percent for both low- and upper-income households (Table 7).
The overall denial rate in 2001 was 21 percent, down from a rate of 27 percent in 2000. A large portion of this decline can be attributed to a significant drop in the number of applications for manufactured home loans. In 2000, the roughly two-dozen reporters categorized by HUD as manufactured home lender specialists accounted for 57 percent of all the reported denials of applications for conventional home purchase loans, even though they accounted for only 23 percent of all the applications for such loans. Manufactured home lenders deny about two-thirds of all the applications they receive for conventional home purchase loans. The number of applications for conventional home purchase loans submitted to these lenders in 2001 dropped 35 percent from the level in 2000, reflecting difficulties in the manufactured housing market.
Denial rates for conventional home purchase loans continue to vary among applicants by racial or ethnic characteristics and by income; in 2001, however, denial rates were markedly lower than in 2000 for all racial and ethnic groups, and for all income groups. In 2001, 36 percent of black applicants, 35 percent of Native American applicants, 23 percent of Hispanic applicants, 16 percent of white applicants, and 11 percent of Asian applicants were denied conventional home purchase loans (Table 3). Denial rates for conventional home purchase loans in 2000 were 45 percent for blacks, 42 percent for Native Americans, 31 for Hispanics, 22 percent for whites, and 12 percent for Asians. The decline in denial rates from 2000 to 2001 follows the pattern in declining denial rates since 1998. This pattern is in contrast to the experience over the longer period from 1993 to 1998, when denial rates for all ethnic and racial groups increased substantially.
Differences in the income levels of the racial or ethnic groups accounted for some of the differences among them in denial rates during 2001. However, other factors are more important given that for all income groups, white and Asian applicants experienced lower rates of denial than Native American, black, or Hispanic applicants (Table 4). The HMDA data include many lenders' cited reasons for denial; in 2001, 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 (data not shown in tables).
Missing Information on Race and Ethnicity
Under HMDA, for applications taken entirely by telephone a lender may but is not required to collect information on an applicant's race or ethnicity, and sex. For applications taken by mail or electronic means (such as by facsimile or the Internet), a lender must request the information. In all cases, an applicant is not required to provide the information.
The incidence of applications and loans reported without data on race or ethnicity has grown since 1993. From 1993 to 2001, the proporti01/15/2009 11:04 AM or ethnicity data increased from about 8 percent to about 30 percent (Table 8).2 For home purchase loan applications, the proportion of applications missing race or ethnicity data is lower than for applications for home loans of all types, but still has grown substantially, from about 4 percent in 1993 to about 18 percent by 2001, involving roughly 1 million applications. For home purchase loans originated, 13 percent lacked race or ethnicity data in 2001, up from 3 percent in 1993.
The increase in home purchase applications missing data on race and ethnicity is due in part to the 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 2001 suggest that nearly 43 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 2001, preliminary estimates suggest that roughly 32 percent of the increase is attributable to lenders specializing in manufactured home lending.
Under revisions to HMDA effective January 1, 2004,
lenders will be required to distinguish loans for manufactured homes from
loans for site-built homes.
1. The FFIEC has also compiled insurance data submitted by 7 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 2001, show about 2 million applications for PMI (about 1 million for home purchase loans, and .9 million for refinancings). These 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.