Updated:
Original:

Fed Report Needs More Clarity on Mortgages to Indians, Native Hawaiians

The Federal Reserve needs to get a little more inclusive when it comes to tallying mortgages made to minorities.

The Federal Reserve needs to get a little more inclusive when it comes to tallying mortgages made to minorities.

In its analysis of the just-released Home Mortgage Disclosure Act numbers for 2015, the Fed lumps American Indians, Alaska Natives, Hawaii Natives and indigenous Pacific Islanders into an “other minorities” category that includes people who count themselves as multi-racial.

The HMDA filings, required from almost all mortgage lenders except the smallest (less than $44 million in assets), distinguish Indians from Native Hawaiians and multi-racial people, and ICTMN plans on getting those breakouts shortly. For 2014, the three categories were roughly equal. Indians and Alaska Natives made up 0.4 percent of mortgage applications, multi-race was 0.39 percent, and Native Hawaiian share came to 0.29 percent of the national total, according to data from the LendingPatterns database of ComplianceTech, McLean, Virginia.

It could be worse. Until 2000, the U.S. Census Bureau did not distinguish Native Hawaiians and Pacific Islanders (mostly from Guam and American Samoa) from Asians, lumping them in with the much larger Asian cohort.

Putting together Native Americans and Native Hawaiians does create a quasi-indigenous category (the multi-racial category also includes Natives who tally themselves as bi-racial) from which some interesting statistics can be seen.

The analysis, by Neil Bhutta and Daniel N. Ringo of the Fed’s division of research and statistics, shows that “other minorities” got 0.8 percent of both purchase mortgages (where an existing home is purchased) and refinances.

The average value of home loans was almost exactly the same in the two major categories. For purchase mortgages, it was $241,000, and for refis, $240,000. The average amounts for 2015 were above the same values for 2014.

Lending skewed toward “nonconventional” mortgages, meaning loans that are insured or guaranteed by the federal government. For mortgage purchases, this came to a 55 percent share, versus 33 percent nonconventional refis. The balance were in conventional (private) mortgages.

Other minority applicants were denied at a far higher rate for refinancings (40 percent) than for purchase mortgages (17 percent). These numbers are down slightly from 2014.

The biggest reasons for denials to other minorities including Indians and Native Hawaiians were too high debt-to-income ratios (meaning the amount of debt being carried relative to income earned) and credit history.

Incidence of higher-priced lending was higher than average for other minorities in both purchase and refi loans, but only by a little, and both declined from 2014.

For 2015, nearly 7,000 lenders reported their mortgage data to the Federal Financial Institutions Examination Council, an agency of the Fed and other Federal units. Total originations came to 7.4 million out of a total of 12 million applications made.

ICTMN has previously reported that from an early look at 2015 lending in LendingPatterns, Quicken Loans of Michigan appeared to be the top lender to American Indians and Alaska Natives, displacing longtime leader Wells Fargo Bank. Wells fell to second in the early rankings.