Mortgage lending disparities abound; More than half of Native applicants denied loans

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Home mortgage data shows that disparities remain between lending to
American Indians and whites. American Indians, in communities that already
face extreme substandard housing conditions, are denied loans at a
significantly higher percentage rate than whites, according to a National
American Indian Housing Council analysis of the Home Mortgage Disclosure
Act data. The 2004 HMDA data was released Sept. 12 by the Federal Financial
Institutions Examination Council.

The data shows that 18 percent of conventional home mortgage loan
applications for American Indians were rejected while only 8.7 percent of
white applicants were rejected. This disparity remains when the data is
adjusted for borrower and lender characteristics - 11.8 percent versus 8.7
percent for American Indians and whites, respectively. The report, a
statistical review of loans made by 8,800 lenders, also confirms that this
disparity exists.

"This data shows that we still have challenges ahead of us to ensure that
Native Americans have access to home mortgage loans," said NAIHC Chairman
Chester Carl. "Mortgage lenders offering fair loans need to reach out to
Native American communities on and off the reservations."

NAIHC's analysis of data on applications for home purchase, home
improvement, refinancing loans and manufactured home dwellings shows that
53 percent of American Indian applicants were denied and only 27 percent of
American Indian applicants' loans were approved and processed. This
compares to 42 percent denied among white applicants and 37 percent loans
approved and processed.

"The fact that a significantly higher percentage of Native American
applicants were denied than whites cannot be ignored," said NAIHC Executive
Director Gary Gordon. "We want to see Native Americans have the same
borrowing and homeownership opportunities as whites."

Analysis shows somewhat similar disparity for FHA, Farm Service Agency and
Rural Housing Service, and VA home-purchase loans on one to four-family
homes and manufactured" homes. For example, 17 percent of loan applications
from American Indians were denied and 65 percent were approved and
processed. This compares to 75 percent of white applications approved and
processed and 11 percent denied.

FFEIC, a government umbrella group for agencies that oversee lenders, said
the data will give the government a "useful screening tool" to identify
institutions to examine more closely.