African-Americans and Latinos borrowed 62% less in 2009 to purchase or refinance homes when compared with 2004, while mortgages to whites declined by just 17% during the same time frame, according to a study of Home Mortgage Disclosure Act data by ComplianceTech, Arlington, Va.
The study found that the number of prime loans obtained by whites fell by 31%, while the number for African-Americans fell by 76%; the number for Latinos fell a similar amount while for Asian-Americans it fell by 28%.
For subprime loans, the number of these loans originated for African-Americans fell 95% when comparing 2004 and 2009. The number originated to Latinos fell by 92%, to whites, 81% and Asian-Americans, 87%.
The number of Federal Housing Administration insured loans originated for whites increased by 238% between 2004 and 2009, while for African-Americans the increase was only 80%, Latinos, 119% and Asian-Americans, 447%.
ComplianceTech said the market share of FHA loans to whites increased 15% in the five year period; for Asian-Americans, the share was up 86%. The percentage change for African-Americans was a decline of 39%, while Latinos were down 25%.
Maurice Jourdain-Earl, managing director of ComplianceTech said he did the study to counter accusations that loans to "borrowers of color" caused the mortgage meltdown.
"I was also motivated by the demographic shift in FHA lending and the false accusations that Fannie Mae and Freddie Mac contributed to the housing crisis by purchasing loans from borrowers of color to meet their affordable housing goals," he said. "Many political leaders don't realize, or don't want to recognize, that it was mainly the volume of defaulted loans from white Americans that impacted the housing crisis. Minorities simply did not generate enough loans to have that kind of universal impact."
