As expected, the 2009 mortgage data results reflect the general downturn in the housing market. However, the latest Home Mortgage Disclosure report (HMDA) reveals far-reaching and highly disturbing mortgage trends for people of color, especially when viewed in conjunction with existing data.
African-American and Latino families are less likely to receive sustainable home loans; they pay more for the mortgages they do get; they are more likely to experience foreclosure; and, as a result, the gap in home ownership is rapidly growing wider between white families and families of color.
Consider these facts:
• Unsustainable loans: African-Americans, Latinos and other communities of color received a large, disproportionate share of abusive sub-prime mortgages—even after controlling for risk factors such as income and credit score.
• Disproportionate foreclosures: Among recent borrowers, the Center for Responsible Lending estimates that nearly 8% of both African Americans and Latinos have lost their homes to foreclosures, compared to 4.5% of whites.
• Less access to credit. Consistent with previous HMDA reports, the most recent report shows that across all categories of loans, African-American and Latino borrowers were more likely to be turned down for a mortgage compared to whites, even after controlling for factors such as income and location of property.
• Shrinking home ownership: The disproportionate impact of abusive lending, tight lending, and foreclosures is taking its toll, as the home ownership gap between non-Hispanic white borrowers and borrowers of color has widened.