District Circular Letters
August 11, 1999
BANKING SUPERVISION AND REGULATION:
FFIEC MORTGAGE LENDING DATA
To State Member Banks
and Bank Holding Companies
in the Twelfth Federal Reserve District
FFIEC Data on 1998 Mortgage Lending Activity
The Federal Financial Institutions Examination Council (FFIEC) has released
data about 1998 mortgage lending activity in metropolitan areas along with
analyses of nationwide summary statistics regarding lending patterns. The
data reflect lending activity for 7,837 institutions, both depository and
non-depository, that are covered by the Home Mortgage Disclosure Act (HMDA)
and that reported data to member agencies of the FFIEC--the Federal Deposit
Insurance Corporation, Federal Reserve Board, National Credit Union Administration,
Office of the Comptroller of the Currency, and Office of Thrift Supervision--and
to the Department of Housing and Urban Development (HUD).
The 1998 data include 24.7 million reported loans and applications, an increase
of about 50 percent from 1997, resulting primarily from a very large increase
in refinancing activity. The number of home purchase loans extended in 1998
compared with 1997 increased 21 percent for Native Americans, 16 percent
for Hispanics, 13 percent for Asians and Whites, and 9 percent for Blacks.
During the six years from 1993 through 1998, the number of home purchase
loans extended has increased 87 percent for Hispanics, 72 percent for Blacks,
52 percent for Native Americans, 46 percent for Asians, and 31 percent for
Whites. (The period 1993-1998 is used because HMDA coverage was expanded
in 1993 to include a significantly large group of independent mortgage companies.)
The number of home purchase loans extended to applicants in all income categories
increased in 1998 over the prior year. The number of such loans extended
in 1998 to applicants with incomes less than 80 percent of the median family
income for their metropolitan statistical area (MSA) increased 19 percent
over 1997. During the same period, applicants with incomes of 100-119 percent
of their MSA's median experienced a 15 percent increase, while 14 percent
increases were experienced by applicants with incomes of 80-99 percent and
120 percent or more of the median.
During the six years from 1993 through 1998, the number of home purchase
loans extended to applicants with incomes less than 80 percent of the median
increased 64 percent. During the same period, applicants with incomes equaling
or exceeding 120 percent of the median experienced an increase of 45 percent.
Applicants with incomes of 80-99 percent and 100-119 percent of the median
experienced increases of 42 percent and 37 percent respectively.
While a significant number of home purchase loan applications in 1998 was
for government-backed loans, the majority of such applications was for conventional
(non-government-backed) loans. The number of government-backed loans extended
to Native Americans increased 34 percent in 1998 compared with 1997. The
number of such loans extended to Hispanics increased 9 percent over the
same period, while Whites, Blacks, and Asians experienced increases of 5,
3, and 1 percent respectively.
The number of government-backed home purchase loans extended to applicants
in all income categories increased in 1998 from 1997 levels. The number
of such loans extended to applicants with incomes of less than 80 percent
of their MSA's median increased 9 percent, compared with increases of 4
percent for applicants with incomes of 100-119 percent and 120 percent or
more of the median. Applicants whose incomes were 80-99 percent of the median
experienced a 3 percent increase.
The number of conventional loans extended to Hispanics and Native Americans
increased 22 and 17 percent, respectively, in 1998 compared with 1997. The
number of conventional loans extended to Asians and Whites increased 15
percent over the same period, and the number of such loans extended to Blacks
increased 13 percent.
The number of conventional home purchase loans extended to applicants in
all income categories increased in 1998 from 1997 levels. Applicants with
incomes less than 80 percent of the MSA median experienced an increase of
25 percent. Applicants with incomes of 80-99 percent and 100-119 percent
of the median experienced increases of 20 percent, while applicants whose
incomes equaled or exceeded 120 percent of the median experienced an increase
of 16 percent.
Denial rates for conventional home purchase loans in 1998 were 54 percent
for Black applicants, 53 percent for Native American applicants, 39 percent
for Hispanic applicants, 26 percent for White applicants, and 12 percent
for Asian applicants. These rates were marginally higher than in 1997 for
each group except Asians, for whom denial rates fell.
The overall denial rate for conventional loans was 29 percent in 1998. This
rate has increased from 17 percent in 1993. Analysis of HMDA data alone
is not sufficient, however, to determine whether this and other observed
patterns in mortgage lending and denial rates result from market forces,
changes in underwriting practices, illegal mortgage discrimination, or differences
in mortgage loan growth among states and MSAs.
Available Data
The disclosure statements underlying the statistics presented above are
available for public inspection at central depositories throughout the nation.
The disclosures include individual financial institutions' disclosure statements
and aggregate data for each MSA. The location of the central depository
for an MSA can be obtained by calling the FFIEC, at (202) 634-6526,
or by visiting the FFIEC web site.
In addition to the disclosures available at central depositories, HMDA data
are available from three other sources: at offices of lenders subject to
HMDA; directly from the FFIEC in Washington, D.C.; and at the FFIEC web
site.
The FFIEC makes HMDA data available in various formats, including paper,
magnetic tape, CD-ROM, and at the FFIEC web site. Tables showing the nationwide
aggregates and key demographic information for MSAs can be obtained in paper
form. The data for all individual loans and applications, submitted by the
reporting institutions, are available on CD-ROM and magnetic tape.
The HMDA reports contain data about loan originations, loan purchases, and
applications that did not result in a loan; and they give information about
three characteristics of applicants or borrowers: race or national origin,
sex, and annual income. For most loans relating to property located in MSAs,
as well as some loans relating to property located outside MSAs, the reports
identify the geographic location, usually by census tract.
The HMDA data also include information on loans that are sold, showing the
type of purchaser of the loan. Among other things, this information is used
by HUD in assessing the performance of Fannie Mae and Freddie Mac in meeting
their legislatively mandated affordable housing goals.
The FFIEC also provides data on mortgage insurance applications. Data from
the nation's eight private mortgage insurance (PMI) companies were compiled
under the auspices of the Mortgage Insurance Companies of America, and are
available at individual PMI companies, at the central depositories in each
MSA, and from the FFIEC.
Copies
An eleven-page order form, with descriptions of the various reports and
formats available, along with a series of tables illustrating the statistics
presented above, can be found at the FFIEC web site, at http://www.ffiec.gov/hmcrpr/hm072999.htm.
To receive a copy of these publications via mail, please call our
Corporate Services Department, at (415) 974-2748.
For Additional Information
For additional information regarding these matters, please contact our Banking
Supervision and Regulation Department, at (415) 974-2967.
FEDERAL RESERVE BANK OF SAN FRANCISCO
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