African-American mortgages down 49 percent from 2006 to 2007

NEWS

For Immediate Release

Contact: John William Templeton 415-240-3537

African-American mortgage lending down 49 percent from 2006 to 2007; one-third of 2007 applicants denied

WASHINGTON – blackmoney.com and blackbusinessmonth.com reported the subprime crisis meant that a third of African-American mortgage applicants nationally were denied in 2007, according to the latest Home Mortgage Disclosure Statements.

Executive editor John William Templeton said, “This crisis has caused more than $100 billion in lost wealth to African-American households, but we have not seen any significant response from policymakers, particularly in comparison to the trillion dollar bailout.”

The number of conventional loans originated to African-Americans declined 49 percent from 550,729 in 2006 to 280,313 in 2007. The number of applicants dropped from 1,133,727 in 2006 to 632,347 in 2007.

Out of 632,347 blacks who applied for conventional loans in 2007, only 280,313 had loans originated. Denied were 206,026 applications in 2007.

Among FHA, FSA/RHS and VA applications, 18,117 of the 88,278 applicants were denied in 2007.

For refinance loans, 503,939 of 1,183,842 black applicants were denied in 2007.

In 2006, 505,667 of 1,470,269 black refinancing applicants were denied.

The Home Mortgage Disclosure Act was passed in 1975 at the urging of the Congressional Black Caucus to fight “redlining” or illegal racial discrimination in lending. Statistics are compiled by the Federal Financial Institutions Examination Council (FFIEC). Researchers have used the data to record continuing bias in loan approval rates, even accounting for differences in credit status and income. In the past several years, higher than average rates have become a new form of discrimination. Many black applicants chose to seek “subprime” borrowing from unregulated sources in response to the discrimination faced at regulated banks.

“Proposed solutions will make the problem of mortgage discrimination against blacks even worse,” added the editor, who conducted the first study by a journalist of HMDA data in 1978 while editor of the Winston-Salem (N.C.) Chronicle. “Ending mortgage discrimination might do more to calm financial markets than rewarding past finance bias.”

see also http://www.thenation.com/doc/20080714/wright

Templeton’s thoughts on a different approach will appear in the October magazine of the New York Society of Securities Analysts.

The web sites are published by San Francisco-based eAccess Corp., a 20-year-old multimedia publisher founded by Templeton. The company created National Black Business Month each August and has created the five annual State of Black Business reports since 2004. The 2008 edition Trouble in the Air described the impact of sub-prime lending as a key risk factor for African-American families and neighborhoods.

Home Mortgage Disclosure Act reports on loan applications, disposition among

African-Americans by sex or joint applicant, United States aggregate data, 2007: Source FFIEC 9/10/2008

FHA/FSA/VA

Conventional

Refinancing

Nonoccupants

Multifamily

5 + Units

Home Improvement

Applications Received

88,278

632,347

1,183,842

223,398

261,382

1,914

47,683

Male

29,074

253,891

385,474

104,343

82,908

933

15,283

Female

34,785

266,541

479,013

77,393

112,879

559

19,668

Joint

24,185

109,611

314,540

40,863

64,766

407

12,589

Loans Originated

56,870

280,313

378,789

88,999

75,668

1,080

11,370

Male

18,724

105,063

118,005

40,022

23,406

513

3,932

Female

21,581

11,610

156,835

29,330

31,760

271

4,346

Joint

16,456

55,873

102,814

19,451

20,288

289

3,068

Approved/Not Accepted

3,360

64,576

100,740

21,359

17,303

85

6,533

Male

1,145

26,335

34,263

9,915

5,498

37

2,201

Female

1,347

27,069

40,996

7,493

7,453

33

2,682

Joint

854

10,864

24,960

3,841

4,282

14

1,618

Applications Denied

18,117

206,026

503,939

84,636

145,305

492

27,608

Male

6,027

88,890

164,641

40,929

47,106

247

8,406

Female

7,695

88,846

203,380

30,640

64,409

171

11,919

Joint

4,327

29,538

133,989

12,759

33,337

71

7,201

Applications Withdrawn

8,503

58,551

152,524

21,116

19,487

16

1,928

Male

2,674

24,008

51,476

9,913

5,728

8

670

Female

3,543

24,236

58,982

7,357

7,703

4

619

Joint

2,249

9,924

41,053

3,697

5,980

4

635

Incomplete Files

1,428

22,881

47,850

7,268

3,619

244

Male

504

9,595

17,069

3,564

1,170

74

Female

619

9,780

18,820

2,573

1,554

102

Joint

299

3,412

11,724

1,115

879

67

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