This report examines systemic inequities in the mortgage market, as reflected in neighborhood lending patterns based on race and ethnicity. The authors analyzed 2010 Home Mortgage Disclosure Act (HMDA) data, and compared conventional and government-backed prime mortgage lending in seven U.S. cities, based on borrowers’ race and ethnicity and the racial and ethnic composition of neighborhoods.
The report shows that black and Latino borrowers and borrowers in communities of color received government-backed loans—insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA)—significantly more often than did white borrowers. The findings indicate persistent mortgage redlining and raise serious concerns about illegal and discriminatory loan steering.
Key Findings Include:
- FHA and VA loans accounted for three out of every four home-purchase loans made to blackborrowers, and two out of every three loans made to Latino borrowers, compared to approximatelyone out of every three loans made to white borrowers.
- Borrowers who purchased homes in communities of color received government-backed loans twice asoften as did borrowers in predominantly white communities.
- Black and Latino homeowners received government-backed refinance loans 3.5 and 2.1 times moreoften than did white homeowners, respectively. Homeowners in communities of color receivedgovernment-backed refinance loans more than three times as often as did homeowners inpredominantly white neighborhoods.