Share of Mortgages for Black or African American Borrowers Increases Slightly

June 16, 2022

The share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose from 7.3 percent in 2020 to 7.9 percent in 2021, according to data released by the Federal Financial Institutions Examination Council (FFIEC).

Meanwhile, the share made to Hispanic-White borrowers increased slightly from 9.1 percent to 9.2 percent, and those made to Asian borrowers increased from 5.5 percent to 7.1 percent.

The Home Mortgage Disclosure Act (HMDA) requires covered institutions, including banks, savings associations, credit unions and mortgage companies, report data on mortgage transactions.

In 2021, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 15.7 percent and 9.8 percent respectively, while the denial rates for Asian and non-Hispanic-White applicants were 7.5 percent and 5.6 percent respectively.

According to the data, the share of mortgages originated by non-depository, independent mortgage companies has increased and, in 2021, accounted for 63.9 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans,

For 2021, the number of reporting institutions declined by about 3.1 percent from 4,475 in the previous year to 4,338. The 2021 data included information on 23.3 million home loan applications. Among them, 21.1 million were closed-end and 1.8 million were open-end. Another 350,000 records are from financial institutions making use of Economic Growth, Regulatory Relief and Consumer Protection Act’s partial exemptions and did not indicate whether the records were closed-end or open-end.

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