Circular
Statistical Analyses of 1996 Mortgage Lending in Metropolitan Areas
October 27, 1997
Circular No. 10990

To the Chief Executive Officers of State Member Banks in the Second Federal Reserve District:

Our Circular No. 10969, dated July 29, 1997, contained a press release from the Federal Financial Institutions Examination Council (FFIEC) announcing the availability of data on 1996 mortgage lending transactions at individual institutions in metropolitan areas throughout the nation. The following is from an additional press release on this topic issued by the FFIEC:

The Federal Financial Institutions Examination Council (FFIEC) has announced the availability of data about 1996 mortgage lending activity in metropolitan areas and released analyses of nationwide summary statistics regarding lending patterns.

The data reflect lending activity for more than 9,300 institutions covered by the Home Mortgage Disclosure Act (HMDA) that reported data to member agencies of the FFIEC--the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration, and Federal Reserve System--and to the Department of Housing and Urban Development.

The 1996 data include a total of 14.8 million reported loans and applications, an increase of 32 percent from 1995. They show an overall increase in the number both of government-backed and of conventional home purchase loans from 1995, with lending to lower-income households up somewhat more than lending to higher-income households. Taken together, government-backed and conventional home purchase lending to all racial and ethnic groups increased from 1995. Lending to Hispanics increased 13.4 percent; to Native Americans, 11.4 percent; to Asians, 8.2 percent; to Whites, 8.1 percent; and to Blacks, 3.1 percent.

By comparison, from 1993 to 1996, government-backed and conventional home purchase loans have risen 55.6 percent for Hispanics, 52.5 percent for Blacks, 26.6 percent for Native Americans, 15.3 percent for Asians, and 14.0 percent for Whites.

For conventional home purchase loans, taken by themselves, the denial rates continue to vary among racial and ethnic groups. For conventional home purchase loans, 50.2 percent of Native American applicants, 48.8 percent of Black applicants, 34.4 percent of Hispanic applicants, 24.1 percent of White applicants, and 13.8 percent of Asian applicants were denied loans in 1996.

The disclosure statements underlying these and other summary statistics are now available for public inspection at central depositories throughout the nation. The disclosures include individual financial institutions' disclosure statements and aggregate data for each metropolitan statistical area (MSA). (The location of the central depository for an MSA can be obtained by calling the FFIEC at 202/634-6526.)

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 charactewristics of applicants or borrowers: race or national origin, gender, and annual income. For loans relating to property located in MSAs, as well as some loans relating to property located outside of MSAs, the reports identify the geopgraphic 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 the Department of Housing and Urban Development in assessing the performance of Fannie Mae and Freddie Mac in meeting their legislatively mandated affordable housing goals.

The FFIEC makes HMDA data available in various formats, including paper, magnetic tape, PC diskette, and CD-ROM. Tables showing the nationwide aggregates and key demographic information for MSAs can be obtained in paper form. The raw data for all individual loans and appoications are available on CD-ROM, magnetic tape, and PC diskette.

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.