Tables are in Portable Document Format (PDF).
The following analyses of 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 and Regulation C.*
For 1996, the FFIEC prepared 42,936 disclosure statements for 9,328 lenders, with a separate statement for each metropolitan area in which the lender has an office (table 1). The data reflect the lending activity of 4,829 commercial banks, 960 savings associations, 2,311 credit unions, and 1,228 mortgage companies (267 of these were affiliates of depository institutions and the remainder were independent entities).
Applications Received and Loans Made
In 1996 these lenders acted on 13.0 million applications for home purchase loans, home improvement loans, and refinancings (compared with 9.9 million in 1995), and they purchased 1.8 million loans (compared with 1.3 million in 1995). The total volume of reported home loan applications and purchases (14.8 million) increased 32 percent from 1995, primarily due to a 68 percent increase in the number of refinancing transactions. The increase in refinancing activity was likely due to the effects of lower interest rates, particularly in the early part of 1996.
Loan Programs and Changes in Lending Volume by Race and Income
Lending institutions tend to specialize in different types of home loans (table 2). For example, among home purchase loan originations, mortgage companies tend to do most of the government-backed lending. Commercial banks, on the other hand, do most of the home improvement lending.
* The FFIEC also has compiled insurance data submitted by the nation's eight private mortgage insurance (PMI) companies under the auspices of the Mortgage Insurance Companies of America. The data relate to application decisions made by the PMI companies during 1996, and show 1.38 million applications for private mortgage insurance (approximately 1.13 million for home purchase loans and 240 thousand for refinancings). The disclosure statements are available from the individual companies, at the MSA central depositories, and from the FFIEC in the same formats as the HMDA data.
Among applicants, some are more likely than others to apply for certain types of home loans (table 3). For example, low- or moderate-income and middle-income households are more likely to apply for government-sponsored home loans (26.7 percent, 29.5 percent, and 24.8 percent, respectively) than are high-income households (12.0 percent). In addition, Blacks and Hispanics (29.1 percent and 33.2 percent, respectively) are more likely to apply for government-sponsored loans than are Asians, Native Americans, or Whites (11.9 percent, 12.5 percent, and 15.6 percent, respectively).
Taking government-backed and conventional home purchase lending together, lending to all racial and ethnic groups increased from 1995 to 1996. Lending to Hispanics increased 13.4 percent; to Native Americans, 11.4; to Asians, 8.2 percent; to Whites, 8.1 percent; and to Blacks, 3.1 percent (table 4).
Overall, conventional home purchase lending taken by itself was also higher in 1996 compared with 1995 (table 5), though conventional loans to Blacks decreased by 1.5 percent. Conventional home purchase loans increased by 7.0 percent to Asians, 6.7 percent to Whites, 6.1 percent to Native Americans and 0.5 percent to Hispanics. Conventional home purchase lending to households in all income categories increased from 1995 levels; lending to low- and moderate-income households was up somewhat more than lending to higher-income households.
For conventional home purchase loans, the denial rates continue to vary among applicants by income and racial or ethnic characteristics (table 6). For example, loan applications filed by Native Americans, Blacks, and Hispanics were more likely to be turned down than those submitted by Whites and Asians. In 1996, 50.2 percent of Native American applicants, 48.8 percent of Black applicants, 34.4 percent of Hispanic applicants, 24.1 percent of White applicants, and 13.8 percent of Asian applicants were denied conventional home purchase loans. The denial rates for all racial and ethnic groups were higher in 1996 than in 1995, when denial rates were 41.4 percent for Native Americans, 40.5 percent for Blacks, 29.5 percent for Hispanics, 20.6 percent for Whites, and 12.5 percent for Asians.
Differences in the income levels of the various racial or ethnic groups account for some of the differences in denial rates among the groups (table 7). Other factors are more important, however, since White and Asian applicants, in all income groups, had lower rates of denial than Native American, Black, or Hispanic applicants. The HMDA data provide some information on the reasons for denial, with poor credit or no credit history most frequently cited by lenders as the reason for denial of conventional home purchase loan applications.