February 10, 2011 (Shirley Allen)

In a special report released by ComplianceTech, African-Americans and Latinos borrowed 62 percent less in 2009 to purchase or refinance homes when compared with 2004, while mortgages to whites declined by just 17 percent during the same time frame.

Compliance Tech provides specialized information to the lending industry and has an array of reports on their website covering anything from racial disparities in lending to the politics and demographic impact of the current housing and mortgage crisis.

Based on a recent study of the Home Mortgage Disclosure Act, Maurice Jourdain-Earl, managing director of ComplianceTech, said their study was conducted to counter accusations that loans to “borrowers of color” caused the mortgage meltdown by providing the following information:

– The number of prime loans obtained by whites fell by 31 percent, while the number for African-Americans fell by 76 percent, and the number for Latinos fell a similar amount, while for Asian-Americans it fell by 28 percent.

– For sub-prime loans, the number of these loans originated for African-Americans fell 95 percent when comparing 2004 and 2009. The number originated to Latinos fell by 92 percent, to whites by 81 percent and Asian-Americans by 87 percent.

– The number of Federal Housing Administration (FHA) insured loans originated for whites increased by 238 percent between 2004 and 2009, while for African-Americans the increase was only 80 percent, Latinos, 119 percent and Asian-Americans, 447 percent.

– The market share of FHA loans to whites increased 15% in the five year period; for Asian-Americans, the share was up 86 percent. The percentage of change for African-Americans was a decline of 39 percent, while Latinos was down 25 percent.

“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.”

A very interesting, and I’m sure to be, a very controversial hypothesis.

Tags: compliancetech, borrowers of color, mortgage meltdown, prime loans, sub-prime loans, fha lending, housing crisis, minorities