More Than Four of Ten Native Mortgage Applications Went Unfunded in 2011

More Than Four of Ten Native Mortgage Applications Went Unfunded in 2011

Mark Fogarty
10/25/12

Nearly one in every two American Indian applicants for a mortgage did not get one last year, federal data show.

According to Home Mortgage Disclosure Act (HMDA) records, lenders funded $5.3 billion to Indians and Alaska Natives last year, while $4.5 billion went unfunded as a result of lender denial, incomplete applications, borrower withdrawal of the application, and other factors.

That translates to 54 percent of Indian loan applications funded and 46 percent unfunded.

Native Hawaiians fared a little better, with 57 percent of loans ($4.6 billion) funded last year. White borrowers fared best last year, with a 64 percent approval rate. The national average for all lenders was 59 percent.

Compared to 2010, mortgages to Indians declined $700 million, from $6 billion to $5.3 billion. That’s in line with a national decline in mortgages from $1.6 trillion in 2010 to $1.4 trillion last year. Native Hawaiian mortgage lending fell from $5.8 billion in 2010, about a 20 percent decline.

In all, total Native lending was $9.9 billion last year, down from $11.8 billion in 2010.

A request for comment on the numbers to Mellor Willie (Navajo), executive director of the National American Indian Housing Council (NAIHC), and Cheryl Causley, a member of the Bay Mills Indian Community of Michigan and NAIHC chair, was unanswered by deadline.

Alaska lenders had the highest approval rate for Indian mortgages last year, at 67 percent. Alaska Natives are included in the Indian totals. Puerto Rico came in lowest, at 36 percent.

Not surprisingly, California led all states in dollar volume of lending to Indians, the HMDA data show, at $1.4 billion. Puerto Rico (a territory rather than a state) came in lowest at $4 million.

For Native Hawaiians, Nebraska was the friendliest state, with 78 percent of Native Hawaiian applications approved. California granted the most loans in dollar volume, at more than $1. 7 billion, while Hawaii followed with $725 million.

In terms of individual lenders for 2011, Wells Fargo, Sioux Falls, South Dakota, was first, with $787 million. A Chickasaw-owned bank, Bank2 of Oklahoma City, cracked the top ten at number 10 with $65.6 million.

Six mortgage lenders made more than $100 million in loans to Indians last year. Besides Wells, they are Bank of America, Charlotte, North Carolia; JPMorgan Chase, Columbus, Ohio; USAA Federal Savings Bank, San Antonio, Texas; Quicken Loans, Livonia, Michigan; and Ally Bank/Rescap of Midvale, Utah. Nearly 2500 lenders in total reported making at least one home loan to Indians last year.
Just three lenders reported making more than $100 million in mortgages to Native Hawaiians last year. They are Wells Fargo ($629 million), Bank of America ($352 million) and JPMorganChase ($347 million). Some 1,800 institutions reported making at least one home loan to Native Hawaiians last year. (The group also includes Pacific Islanders from Guam and American Samoa).

Bank of Hawaii, Honolulu, nearly made the top ten in loans to Native Hawaiians in 2011, coming in 11th at 59 million. Two more Hawaiian lenders made the top 20: Central Pacific and American Savings Bank.

A credit union, Navy Federal of Vienna, Virginia, came in 17th in lending to Native Hawaiians and 18th in home loans to American Indians. Credit unions, though small, have been making inroads into the market shares of banks and mortgage banks.

Essentially all mortgage lenders in the United States are required to file HMDA reports on their total and minority lending. The reporting is supervised by the Federal Financial Institutions Examination Council, a unit of the Federal Reserve and other federal agencies.

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