|
|||
Late Breaking News |
|||
| Date: August 6, 1998 6:16 pm Contact: National Community Reinvestment Coalition John Taylor or Josh Silver, 202-628-8866 |
|||
Latest News Releases
|
NCRC Says American Dream of Homeownership Slipping Away; Minorities, Lower Income Borrowers Suffer Most | ||
| WASHINGTON - August 6 - The following was released today by the National
Community Reinvestment Coalition: John Taylor, president and CEO of NCRC: "The 1997 HMDA data asks us as a nation to redouble our efforts. The American dream of homeownership is slipping away. After steady progress in mortgage lending to low-income and minorities in the early 1990's, the 1997 and 1996 data reveal a slowdown that is troubling and disheartening to the hopes and aspirations of underserved communities across the country." In 1997, African-Americans suffered a denial rate of 53 percent when they applied for conventional mortgage loans. This is more than twice the white denial rate, and is an alarming increase from the 49 percent denial rate in 1996. More than half of Native-American applicants were denied loans. Hispanics experienced a rejection rate of about 38 percent, which was also higher than last year's rejection rate. These high rejection rates translate into few loans reaching minorities. Hispanic borrowers received two percentage points fewer conventional loans in 1997 than 1996. African-Americans reaped a mere two percentage point gain in the number of loans in 1997. This compares to a hike of 55 percent and 42 percent in conventional loans for African-Americans and Hispanics, respectively, from 1993 to 1994. The percentage increases in government-insured mortgage loans for minorities is also down from 1996 to 1997 compared to earlier years. "Fair lending enforcement has trailed-off," declares NCRC's Taylor. "Big banks are becoming complacent because federal regulators are rubber stamping megamergers. Increasingly, large banks have subprime affiliates engaging in high interest and predatory lending. Denial rates for conventional loans are going up while the large banks are increasingly referring minorities to their subprime affiliates. Meanwhile, the Federal Reserve Board is approving megamergers without requiring lenders to institute fair lending monitoring, training, and reporting back to the Fed on the status of fair lending programs." Conventional home purchase lending to low- and moderate-income borrowers has also slowed considerably. Low and moderate-income families received only 2.3 percent more loans in 1997 than 1996. This is 13 times less than the 27 percent increase in mortgage loans from 1993 to 1994. A similar trend is evident in lending to low- and moderate-income census tracts. Taylor continues, "CRA enforcement is lackluster. About ninety-eight percent of banks and thrifts receive Satisfactory and Outstanding grades in the last three years, when lending to low- and moderate-income communities has declined. In contrast, almost 10 percent of all banks failed their CRA exams in 1992 and 1993. Is there any surprise that early 1990's were good years for lending to the underserved while performance now lags?" Federal regulatory agencies must increase the rigor of their CRA exams. A recent Inspector General audit showed that the Office of the Comptroller of the Currency was not contacting community organizations for their input on the CRA performance of lenders. In cases where regulatory agencies have listened to community groups, lenders have been rated accurately, weaknesses in their performance have been noted, and lenders have taken steps to address those weaknesses. "We must all work together -- lenders, regulators, and community groups -- to reverse the 1997 record in 1998 and beyond. Otherwise, the American dream will vanish for minority and lower income communities," concludes Taylor. ------ The National Community Reinvestment Coalition (NCRC) is the nation's CRA trade organization of 679 community reinvestment organizations. -0- |
|||
