Large drop in 2007 Indian mortgage volume


NEW YORK – Mortgage lending to American Indians and Alaska Natives fell by nearly 30 percent last year as the mortgage market contracted and subprime lenders that served the Native market went out of business by the dozens.

In another indication of the stagnant Indian market, lenders loaned more mortgage money to Native Hawaiians than they did to American Indians last year, federal data showed. And, average loan size to Native Hawaiians was 33 percent higher than it was for Indians.

According to 2007 Home Mortgage Disclosure Act numbers, some 3,000 lenders extended $15.5 billion in mortgage credit to Indians and Alaska Natives last year in 86,456 loans, for an average of about $180,000 per loan. Some 2,300 lenders made $16.1 billion in mortgages to Native Hawaiians and Pacific Islanders, in 67,285 loans that averaged $240,000 apiece.

Approximately 16 percent of mortgage lending to both Indians and Native Hawaiians was subprime last year ($2.5 billion apiece).

Total lending to Indians and Native Hawaiians dropped last year as the mortgage market cratered. Indian/Alaska Native home finance fell by $6.6 billion, from $22.1 billion. Total Native volume of $31.6 billion was well down from other recent years, such as 2004 when the combined total reached $45 billion.

With a market share of about 1 percent of $3 trillion in total lending, Indians, Alaska Natives and Native Hawaiians found themselves underrepresented in terms of their total population percentage. However, about 25 percent of borrowers did not disclose race on their mortgage applications last year, meaning those numbers must be higher than they show in the HMDA tallies.

Countrywide Home Loans, along with its affiliate Countrywide Bank FSB, made the most dollar volume in mortgages to Indians and Alaska Natives last year. The California lender, now acquired by Bank of America, made $3.8 billion in loans through the two units to place both first and third. Bank of America, Charlotte, N.C., made a further $1 billion in loans to Indians, meaning the combined institution’s total would have been $4.8 billion.

Wells Fargo was the only other lender that made more than $1 billion in loans to Indians last year, HMDA data showed. Wells Fargo Bank, Minneapolis, loaned Indians $1.6 billion in mortgage finance, while Wells Fargo Funding, its finance unit, did another $278 million.

Indigenous People Underserved on Mortgages

In the states where they make up a significant part of the population, American Indians, Alaska Natives and Native Hawaiians are not getting a proportional amount of mortgages, government data showed. In Alaska, where more than 20 percent of the population is native, less than 4 percent of mortgages are being extended to them, according to 2007 Home Mortgage Disclosure Act data. In New Mexico, where Indians make up 11 percent of the population, they got just 1.3 percent of the mortgages last year. In South Dakota, about 9 percent Indian, the total is even worse – less than one percent. Only Native Hawaiians in Hawaii are getting even halfway decent representation in state mortgage totals, at nearly 10 percent last year, HMDA data showed. In Alaska, $225 million out of $6.1 billion in mortgages was extended to Indians or Alaska Natives. In New Mexico, the tally was $226 million out of $17 billion. South Dakota measured just $25.5 million to Indians, out of a total of $3.8 billion. Indigenous people in New Mexico got a larger than average amount of subprime mortgages. In the Land of Enchantment, $53 million in mortgages made to Indians last year was subprime, or nearly 25 percent. In Hawaii, the subprime percentage was about 12 percent ($311 million), with a similar percentage in Alaska ($28 million). In South Dakota, $4.8 million, or 18 percent, was subprime. The top lender to Indians and Alaska Natives in 2007 in Alaska was Wells Fargo Bank, with $1.1 billion in volume. Second was Residential Mortgage LLC, at $880 million, and third Alaska USA Mortgage Co., at $604 million. In Hawaii, Countrywide Home Loans was first in lending to Native Hawaiians and other Pacific Islanders at $486 million in 2007, and a second unit, Countrywide Bank FSB, was second at $341 million. Taking the bronze was American Savings Bank, at $105 million. Countrywide also picked up two of the top three spots in lending to Indians in New Mexico. Countrywide Home Loans was first at $29 million and Countrywide Bank third at $17 million. Beneficial Co. LLC took the silver at $23 million. Wells Fargo was the top lender to Indians in South Dakota last year, with $6.2 million in volume. Countrywide Home Loans was second, at $2 million, and Beneficial third at $1.1 million.

With so many subprime lenders closing this year, the top 10 lenders to Indians were not heavily weighted with them last year. However, the wave of bank consolidations is in clear evidence in the list. JPMorganChase Bank, Columbus, Ohio, was fifth, at $510 million. Sixth was Washington Mutual Bank, Seattle, at $439 billion. JPMorganChase has acquired Washington Mutual, meaning the combined total of the two last year was nearly $1 billion.

In seventh place was IndyMac FSB, Pasadena, Calif., at $296 million. IndyMac was seized by the federal government earlier this year and reopened under government control.

The eighth place lender, World Savings Bank, made $242 million of mortgages to Indians in 2007. It was acquired by Wachovia Bank, which itself made $40 million in loans to Indians. Wachovia in turn has been acquired by Citigroup, whose Citimortgage unit made a further $153 million.

Coming in ninth was Beneficial Co., Elmhurst, Ill. at $226 million, and tenth was National City Bank of Cleveland, at $206 million. National City has just been bought by PNC Bank.

Many of the same lenders were the top mortgage providers to Native Hawaiians last year. Countrywide was both first and second, totaling $3.8 billion, and Wells came third at $1 billion, Bank of America was fourth, at $807 million.

Beneficial Co. was the top subprime lender to Indians last year, at $83 million. It was followed by Washington Mutual Bank, at $59 million, and Countrywide, also at $59 million. Washington Mutual was the biggest lender to Native Hawaiians last year, at $106 million, followed by World Savings Bank ($93 million) and IndyMac Bank ($50 million).

HMDA requires essentially all mortgage lenders to report their mortgage lending and segregate it by race and other characteristics each year. It is administered by the Federal Financial Institutions Examinations Council, an agency of the Federal Reserve Bank and other federal agencies. More than 8,000 financial institutions filed HMDA reports last year.

Native Hawaiians and Pacific Islanders originally were lumped in with the “Asian” HMDA category. Since 2004 they have been broken out separately, enabling a more accurate tally of Native mortgage lending.