Study Reveals Home Mortgages to Blacks and Hispanics Decreased Since Housing Market Crisis
Contrary to the implausible theory by some conservative Republicans and commentators that cite mortgage lending to minorities in low-and moderate-income areas as the reason for the housing crisis, a new study slated to be released this week reveals that African-Americans and Hispanics actually received significantly fewer mortgages than whites between 2004—before the housing crisis began—and 2009.
According to the study, “The Foreclosure Crisis and Racial Disparities in Access to Mortgage Credit 2004-2009,” by ComplianceTech, which analyzes mortgage data for government, non-profit organizations and financial institutions, African-Americans and Hispanics were able to borrow 62 percent less to buy or refinance homes in 2009 than in 2004. Specifically, mortgages made to Hispanics dropped from $214 million to $78 million, and mortgages to blacks dropped from $122 million to $49 million.
While mortgage dollars going to white borrowers also declined, it only did so by 17 percent, or, from $1.3 billion to $1.1 billion. Mortgage lending to Asians stayed the same at about $128 million.
The study also found disparities in how financial institutions approved mortgage applications and made mortgage loans. Whites were about twice as likely as African-Americans and Hispanics to be approved for prime mortgages with the lowest interest rates, while blacks and Hispanics were two to four times more likely to receive subprime loans, which have higher rates.
So what does this all mean?
The study concluded that a “dual mortgage market” has emerged with white and Asian borrowers having better access to lower-cost mortgages than blacks and Hispanics.
Maurice Jourdain-Earl, the founder and managing director of ComplianceTech who conducted the study, told America’s Wire, “The higher cost for mortgage credit translates into less money for basic necessities. The higher cost for mortgage credit also translates into African Americans and Latinos having lower homeownership rates and lower opportunities to build wealth, lower educational achievement and higher unemployment.”
To read more, check out America’s Wire