`Fair' lending sought for minorities

Area blacks, Hispanics often rejected, group finds

October 17, 2004|By Kathleen Cullinan | Kathleen Cullinan,SUN STAFF

Baltimore-area minority home shoppers were denied loans more often than their white counterparts last year, and they were turned away at a higher rate than in 1998 or 1993, an advocacy group has found.

African-Americans of all income levels were 2.9 times as likely as whites to be denied conventional home loans last year, according to the Association of Community Organizations for Reform Now. Latinos were turned down 2.1 times as often as whites were.

The ratio in Baltimore was higher than the national average. Nationwide, African-Americans were denied loans 2.2 times as often and Latinos were denied 1.6 times as often as whites were. The study was released Thursday.

The number of minority applicants denied loans in the city was also slightly higher than in than in 1998 or 1993, the ACORN report said.

"This report hopefully will sound an alarm," said ACORN spokeswoman Jacquiline Johnson. "We're not asking for anything special here. We're asking for fairness."

A member of the Maryland Association of Mortgage Brokers said ACORN's report did not tell the full story and that the numbers show more minorities than ever are securing loans.

Banking and housing experts said lenders and real estate companies have worked to expand homeownership opportunities for minorities.

The study looked at applicants' median income and not factors such as debt or credit rating, which might have led to the loan denial, said John Garofalo, a past president of the Maryland Mortgage Brokers' Association.

Furthermore, the report found that African-Americans received 4,057 conventional home loans last year, nearly 200 percent more than they received 10 years before, Garofalo said. Latinos got 695 loans last year, a 700 percent increase since 1993, he said.

"I'm happy to see that more and more people are getting loans," Garofalo said.

The report found that among those making less than $33,650 a year, African-Americans and Latinos were 1.7 times as likely as whites to be denied conventional home loans.

The pattern was the same at higher income levels. African-Americans making more than $80,760 had a higher rate of denials, 16.7 percent, than did low-income whites, 14.4 percent of whom were denied loans.

ACORN tied the study to its fight against proposed regulatory changes by the Federal Deposit Insurance Corp. that would raise the threshold for banks to qualify for "small bank" status. The changes would mean that certain banks would be subject to less stringent performance demands.

ACORN leaders say the regulation changes would result in fewer home loans for middle- and low-income communities.

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