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American Indians and Native Hawaiians Mortgages Shot Down Half the Time

Mark Fogarty
11/27/16

Neither American Indians nor Native Hawaiians received half of the mortgages they applied for last year, though Hawaiians came to within a hair of it.

Native Americans (including Alaska Natives) received 46 percent of the loans they applied for, according to data lenders filed with the federal government. They applied for 70,000 mortgages in 2015 and received 32,500, the data show.

Native Hawaiians (including indigenous Pacific Islanders from Guam and American Samoa) applied for 49,000 and were successful in 24,600 cases, or a rate of 49.95 percent.

These numbers included those who identified themselves as Native by race and Hispanic by ethnicity.

Successful applications for the whole country were not much higher than Native percentages, at 51.1 percent (7.4 million loans granted of 14.4 million requested), according to data lenders filed to comply with the Home Mortgage Disclosure Act.

Native Americans saw 28 percent of their loan applications denied, while loan denials came to 23 percent for Native Hawaiians. The balance of applications that weren’t approved came for other reasons, such as incomplete or withdrawn.

In terms of dollars applied for, Native Hawaiians got 53 percent, or $6.4 billion, of the $12.1 billion in dollars they were seeking. Native Americans also inched over 50 percent in dollars requested, receiving $6 billion of $11.96 billion requested, or 50.8 percent.

That makes total indigenous lending for 2015 $12.5 billion, up from $9.7 billion for 2014, according to the HMDA data.

Native Hawaiians received $400 million more mortgage money than Native Americans, despite being a smaller group in population.

They also averaged more per loans, getting $277,000 on a first lien and $43,000 on second liens, compared to $201,000 on first liens and $42,000 on second liens for Native Americans.

Native Americans got a slightly higher percentage of mortgages than Native Hawaiians. Indians received 40 percent of “guvvies” (loans insured by the Federal Housing Administration, the Department of Veterans Affairs, and the Rural Housing Service/Farm Service Agency). Native Hawaiian share of these loans was 38 percent.

Upper income Hawaiians accounted for a slightly larger percentage of mortgages, 53.5 percent than upper income Indians (52 percent). Low and moderate income Indians had a slightly higher percentage of mortgage dollars than Hawaiians, by 16 percent to 12.5 percent.

Native Hawaiians used their mortgage money more to refinance homes (52 percent) than to purchase them (45 percent). Indians were the opposite, using 53 percent of money granted to purchase homes, and 45 percent to refinance.

Hawaiians got more “jumbo” (higher amount) loans than Indians last year, by 25 percent to 16 percent.

Mortgage spreads, which are an indicator of how much interest borrowers are charged, were a mixed bag. For those lenders reporting spreads, Indians had higher spreads on first lien mortgages. Hawaiians, though, had higher liens on second mortgages.

The data come from Home Mortgage Disclosure Act reports filed by some 7,000 lenders with the Federal Financial Institutions Examinations Council, an agency of the Federal Reserve and other federal agencies. The data were analyzed by ComplianceTech, a fair lending and technology firm based in McLean, Virginia, which operates a HMDA database called LendingPatterns.

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