Half of Native Mortgage Applicants Were Denied in 2013

Half of American Indians applying for mortgages last year didn't get one, according to federal data.
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Half of American Indians applying for mortgages last year didn't get one, according to federal data.

"Native Americans" (Indians plus Alaska Natives) were approved for home loans at a rate of 50.85 percent in 2013, while 30 percent saw their applications denied and another 19 percent withdrew or didn't complete their apps, according to Home Mortgage Disclosure Act data sorted by ComplianceTech, Arlington, VA.

Some 26,000 Indians were approved for mortgages last year, HMDA data show, as well as 24,000 "Native Hawaiians" (Native Hawaiians plus Natives from Pacific islands like Guam and American Samoa), who had a somewhat better approval rate at 56.6 percent. About 43,800 Indians or Native Hawaiians were denied loans or fell out of the process.

Looking at one state with a large Indian population (more than 10 percent), New Mexico last year had a dismal showing, with just 35.6 percent of Indian apps being approved. About 43 percent of apps were denied, and another 21 percent fell out. Only 695 mortgages were granted to New Mexico Indians last year, the HMDA data show.

The state's small Native Hawaiian population did much better, with 54.5 percent approvals. Native Hawaiians got 104 mortgages in New Mexico last year.

In dollars, New Mexico Indians were loaned $93 million and Native Hawaiians $16 million. Indians' 1.1 percent share of total mortgage dollars in the state came to about 10 percent of their share of the population.

No mortgage lender made as much as $1 billion in mortgages to Indians last year. Wells Fargo Bank, Sioux Falls, South Dakota, was the top lender last year, according to the ComplianceTech data. It made $730 million in mortgages to Indians/Alaska Natives. Quicken Loans, Detroit took the silver medal, at $397 million, and Bank of America, Charlotte, North Carolina, was third with $338 million.

Other interesting top lenders were a military credit union and a farm credit lender. Navy Federal Credit Union, Vienna, Virginia, was 17th with a volume of $78 million. Farm Credit Services of MidAmerica, Louisville, Kentucky, finished eighth with $89 million. Farm Credit banks concentrate on loans to farmers and ranchers, but they also make rural mortgages.

Bank2 of Oklahoma City, traditionally the mortgage leader in Indian home finance at Indian-controlled lenders, ranked 28th nationwide at $26 million. It is owned by the Chickasaw Nation of Oklahoma.

More than 2,200 lenders made at least one home loan to Indians last year, according to the ComplianceTech data, with a nationwide 2013 total of $5.7 billion. That was down just a bit from $5.8 billion in 2012, according to the ComplianceTech data.

Two of the top three MSAs for Indian lending were in Oklahoma last year. Tulsa was the metropolitan statistical area with the most home loans to American Indians, at 1,456. It was followed by Los Angeles, at 1,367, and Oklahoma City, at 976. Los Angeles County had the most Indian mortgages of any county in the United States last year, at 1,367. Tulsa was second at 773, and Maricopa County, Arizona was third, with 650.

A ComplianceTech analysis of minority lending for the past 10 years (2004 to 2013) found American Indians were granted 296,000 mortgages in the decade, and Native Hawaiians 351,000. That came to a 0.33 percent share for Indians, and 0.32 percent share for Native Hawaiians. (The analysis counted only loans where race was known. More than 10 percent of 2013 mortgages were made to people whose races were not known.)

For "conventional" purchase mortgages, meaning loans on existing homes bought by federal mortgage agencies Fannie Mae and Freddie Mac, share was even lower, at 0.25 percent for Indians and 0.23 percent for Hawaiians. Conventional refinancing showed similar results.

Indians and Hawaiians did a little better on the "government" purchase mortgage category, which includes mortgages made by the Federal Housing Administration, the Department of Veterans Affairs, and the Rural Housing Service. Indian share was 0.5 percent while Hawaiian share was 0.39 percent.

The analysis indicated Indians had a 46 percent approval rate over the decade, while Hawaiians did better, at 51 percent.

The Home Mortgage Disclosure Act dictates that essentially all mortgage lenders divulge their lending volumes and who loans were made to each year, with 7,190 institutions reporting last year. HMDA is supervised by the Federal Financial Institutions Examination Council, a unit of the Federal Reserve and other agencies.