NAACP targets bias in lending Homeowning dream nightmare for blacks, Mfume contends

August 08, 1998|By Jamal E. Watson | Jamal E. Watson,SUN STAFF

NAACP President Kweisi Mfume has called upon the Justice Department and congressional leaders to investigate alleged discriminatory practices against African-Americans and Latinos -- in Baltimore and nationwide -- who have been denied mortgage loans.

Mfume's remarks came on the heels of Thursday's national release of the 1997 Home Disclosure Mortgage Act report.

Compiled by the Federal Financial Institutions Examination Council, which is part of the Federal Reserve System, the report lists the number of home mortgage loans that were granted across the country last year based on racial, geographic and income levels.

"This data clearly indicates that the American dream of homeownership is a nightmare for people of color," said Mfume. "After 10 years of reviewing these statistics and seeing things not getting better, it is clear that something, somewhere is afoul with the lending practices in this country."

A spokeswoman for Attorney General Janet Reno said the office had not received the request from Mfume yesterday and could not comment.

Glenn B. Canner, an economist and senior adviser to the Federal Reserve Board, said the numbers clearly indicate that more African-Americans and Hispanics than in the past are receiving mortgage loans nationally and that banks and lending institutions are moving in the right direction.

The increase in blacks receiving mortgage loans last year was almost twice the increase for whites, said Canner.

He noted that the number of loans blacks received rose 3.9 percent, from 247,692 in 1996 to 257,233 last year, while the number of loans that whites received rose 2 percent, from 2.94 million in 1996 to almost 3 million last year.

59 percent denied

But of the 624,661 blacks nationwide who applied for mortgage loans last year, almost 59 percent, or 367,428, were denied loans.

In the Baltimore area, African-Americans applied for 3,443 mortgage loans last year; 1,983, or about 58 percent, received them. Whites applied for 21,697 mortgage loans; 16,411, or nearly 76 percent, were granted. Hispanics applied for 178 mortgage loans; 99, or about 56 percent, were issued.

Mfume, who represented Baltimore in Congress for 10 years and served on the House Banking Committee before becoming president and chief executive officer of the Baltimore-based National Association for the Advancement of Colored People in 1996, said he is concerned that the number of African-Americans and Latinos being denied mortgage loans remains too high.

"The fact that denial rates are going up instead of coming down suggests a major failing and that greater government oversight DTC of financial services institutions is needed," Mfume said Thursday in a statement released by the NAACP.

But Canner said a number of factors not revealed by the report might indicate why an individual was denied a loan.

Discrimination investigated

"Some are turned down because they are not qualified," said Canner, who noted that the Federal Financial Institutions Examination Council's fair lending review board investigates discrimination in lending practices and makes recommendations to Justice Department officials about potential legal action.

Canner insisted the numbers in the report cannot alone prove discrimination. "So much has to be taken into consideration when looking at the numbers," he said.

Same requirements

Jayne McGeehan, spokeswoman for the Maryland Mortgage Bankers Association, said the association is committed to treating all its applicants fairly and does not use race to determine whether an applicant should receive a loan.

"We hold everyone to the same lending requirements," McGeehan said. "Creditworthiness, the ability to repay a loan and appraisals are important to us."

Mfume also pledged to appeal to the Justice Department to tighten its regulations to better monitor lending institutions to ensure that minorities and low-income citizens are not denied mortgage loans based on race or class.

"We can't continue to allow hard-working citizens who seek to become homeowners to be judged repeatedly by their skin color and ZIP code instead of their creditworthiness," he said.

Pub Date: 8/08/98

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