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Mortgages to Indians increase 23 percent in past year

WASHINGTON - Mortgages measured by a government tally for 2002 show an increase of 22.7 percent from the year before for American Indians.

Denial rates also dropped, to from 35 percent to 23.3 percent, as 66.2 percent of Native borrowers were approved. (The remaining Indian applicants withdrew their loans or had their files closed by the lender.) But Indians applied for mortgages at a lower percentage than their percentage of the national population.

Native Hawaiians and other Pacific Islanders are classified with Asians, making it impossible to determine their results.

The database used by the government is a large one, since it requires all lenders to make racial breakouts under the Home Mortgage Disclosure Act. However, it is by no means a full count of last year's mortgage market since it excludes refinancings, which made up more than half of last year's all-time record $2.8 trillion market.

Also, 28 percent of applicants declined to provide data on race or ethnicity, also skewing the tally.

That being said, the database does include 26.4 million applications made last year, so it does have statistical validity.

From 1993 through 2002, loans to American Indians increased 57.1 percent, the government reported. Total numbers of loans remained low, though, going from 11,936 in 1993 - 1994 to 18,752 in 2001 - 2002.

Gary L. Gordon, executive director of the National American Indian Housing Council, called the result "encouraging." But he noted that just 19 percent of Native Americans applied for government-insured loans, and called for easier access for Natives to loan programs like the Housing and Urban Development section 184 guaranteed Indian mortgage, and the programs of the Department of Veterans Affairs.

Gordon also said he was looking forward to breakouts in upcoming years on manufactured housing, since many Natives buy this type of housing.

The HMDA data show that 4,508 of the 18,752 mortgages granted to Indians last year were government mortgages. That was up 27 percent from the previous year, and 36.7 percent since 1993.

Private mortgages increased 21.5 percent last year, to 14,244, a 64.9 percent boost since 1993.

The government received HMDA reports from 7,771 mortgage lenders last year, an increase from 7,631 the year before, according to the reporting agency, the Federal Financial Institutions Examination Council.

The government broke out denials not only by race/ethnicity, but also by income levels. Not surprisingly, denials to Natives increased as their incomes lessened. So, 78.4 percent of Indians or Alaska Natives making 120 percent or more of area median income were approved, while only 10.7 percent were denied. At 80 percent to 119 percent of AMI, that dropped to 72.9 percent approvals, and increased to 15.7 percent denials.

Between 50 percent and 79 percent of AMI, approvals were 68.2 percent, denials 21.7 percent, while at less than 50 percent AMI, approvals were 54.5 percent and denials 35.5 percent.

On application volume, just 0.6 percent of government mortgage applications were received from Native borrowers (6,118), far lower than their percentage in the national population. And for private ("conventional") mortgages, it was even less, 0.5 percent (25,598).

Oddly, the government reported the number of applications for refinancings and home improvement loans, without reporting how many were denied or approved.

Natives made just 0.4 percent of refinancing applications, 52,672, and 0.6 percent of home improvement applications, at 5,568.

Estimates indicate that 2003 should be another record year for the mortgage industry, as refinancings continued to boom, so Indians may see another jump in volume on this year's data, to be released next summer. However, with interest rates higher since June, the outlook for 2004 is for a substantial drop.