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Mortgage lending to American Indians was down in 2006

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WASHINGTON - According to government data, American Indians and Alaska Natives registered a huge drop in mortgage lending last year and were lapped by home loans made to Native Hawaiians.

According to a sort of Indian/Native Alaska and Native Hawaiian volumes reported to the federal government by more than 8,200 lenders, $22.1 billion in credit was extended to Indians during 2006, down from $27.2 billion in 2005, while mortgages to Native Hawaiians increased to $29.5 billion from $26.5 billion last year.

That would mean a nearly 20 percent drop in Indian volume and about a 12 percent increase in loans to Native Hawaiians. The total of $51.6 billion for the two groups in 2006 would be down slightly from $53.7 billion in 2005.

The mortgage market is in the midst of a disastrous subprime mortgage meltdown this year, and many of the top AI/NH lenders for 2006 were subprime firms or banks with big subprime operations. Several of them have gone out of business this year.

A total of 3,435 institutions reported American Indian lending, according to reports they filed under the Home Mortgage Disclosure Act, while 2,614 reported making loans to Native Hawaiians. Both of these numbers were down by about 100 lenders from 2005.

However, reporting errors are common in HMDA data and may explain why the smaller cohort of Native Hawaiians seems to have gotten more loan dollars from many fewer lenders than American Indians.

This is only the third year in which Hawaiians have been reported separately from the Asian category, for instance, and there may be some confusion between the categories. And the institution that comes out No. 1 in Hawaiian lending, Merrill Lynch Mortgage of New York, shows twice the volume of No. 2, Countrywide Home Loans, but last year was not even in the top 10. In addition, Merrill Lynch reported no loans to whites, blacks, Asian-Americans or American Indians last year, with all loans not made to Native Hawaiians assigned to the N/A category.

Even so, the national totals for Indians reported to the Federal Financial Institutions Examinations Council, a unit of the Federal Reserve System and other federal agencies, is well off 2006 levels. The $22 billion out of a nationwide total of $3.8 trillion represents less than six-tenths of a percent of the total - well below the group's proportional percentage of the national population.

Of those 3,435 lenders that made loans to Natives (less than half of the national total of 8,200 lenders), just 822 reported making $1 million or more in loans to American Indians. One hundred and eighty-eight lenders made more than $10 million in mortgages, while 36 did volumes of more than $100 million. Just two, Countrywide Home Loans and Wells Fargo Bank, did more than $1 billion.

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Calabasas, Calif.-based Countrywide, the nation's largest mortgage lender, reported $3.5 billion in loans to Indians last year. A second unit, either the firm's thrift or its subprime unit, made an additional $461 million in loans, bringing the company total to some $4 billion. Countrywide this year has been rocked by liquidity concerns amid accusations of predatory lending.

Second place goes to San Francisco-based Wells, at $1.6 billion. However, Wells reports all its units separately, making its true totals hard to gauge. But adding up all Wells units in the top 300, which includes its finance company and state banks located in California, Arizona, Washington, Utah and New Mexico, Alaska, Florida and Colorado, comes up with a Native figure of $2.02 billion.

Bank of America, Charlotte, N.C., is the third-largest lender for 2006, at $877 million. Lehman Brothers, New York, through its Aurora ubprime unit, comes in fourth at $829 million.

Fifth place would go to Wachovia Bank of Charlotte if added together with the volume of World Savings Bank, which it acquired last year. A pro-forma on the two comes up with about $750 million in mortgages to Natives.

Another combination, Washington Mutual of Seattle and its subprime unit, Long Beach Mortgage of California, combined made $694 million in Native mortgages, ranking sixth.

A failed subprime lender, New Century Mortgage of Irvine, Calif., was next with $474 million. Another failed lender, GreenPoint Mortgage of Novato, Calif., was in the top 10 at $370 million.

GreenPoint's failure had a special impact on Indian country as its Indian-specific program, TribalPoint, was closed as well.

Failed or failing lenders support the Native Hawaiian side as well. Besides New Century, which was also a top 10 Hawaiian lender, American Home Mortgage of Melville, N.Y., was a top lender to Hawaiians. It failed this year. MortgageIT of New York, another top 10 lender to Hawaiians, curtailed its operations in response to the liquidity crisis.

If Merrill Lynch is discounted as an anomaly, Countrywide was the largest lender to Native Hawaiians, at $2.9 billion. Wells is next, at about $1.5 billion.

Just 776 institutions made more than $1 million in home loans to Native Hawaiians last year. One hundred and ninety-seven extended more than $10 million in credit, while 39 made more than $100 million in mortgages to this sector of the population.