Pattern of Mortgage Rejections Little Changed, Study Says

Blacks remained twice as likely as whites to be turned down for a home mortgage loan last year, according to a federal study released Monday.

Asian Americans were the least likely of any racial or ethnic group to be rejected.

The findings are contained in a report released by the Federal Financial Institutions Examination Council, an umbrella group of five federal regulatory agencies that examined loan activity at 9,300 banks and other institutions subject to federal rules on mortgage lending.

The pattern of rejections was little changed from recent years, notwithstanding a drive by banking regulators to strictly enforce fair-lending rules.

Last year, banks, savings institutions, credit unions and mortgage companies turned down 48.8% of applications for mortgage loans received from blacks and 24.1% from whites, a 2-1 ratio. That is virtually the same ratio as for 1995, when 40.5% of black and 20.6% of white applicants were rejected.

The rejection rate for Asian Americans was 13.8% in 1996, compared with 12.5% in 1995.

For Latino applicants, the rejection rate in 1996 was 34.4%, compared with 29.5% in 1995. Native American applicants were turned down in 50.2% of cases in 1996, up from 41.4% in 1995.

The American Bankers Assn. attributed the continuation of the rejections pattern in part to the fact that lenders have been working harder to solicit applications from minorities who in the past might not have applied. It also said that many rejected applicants receive consumer counseling and go on to make successful loan applications.