Industry NewsMortgage

Mortgage data links higher-priced loans with delinquencies

Racial disparities persist in analysis of loan denials and rates

A new Federal Reserve Board analysis of millions of home loans made in 2006 shows a correlation between higher-priced loans that carry heftier interest rates and the rate of serious delinquencies. As in past years, data collected under the Home Mortgage Disclosure Act revealed blacks and Hispanics were more likely to take out such loans than whites, although it remains a matter of debate whether they are targeted for such loans. Lenders covered by the act reported receiving 27.5 million home loan applications in 2006, including 14 million refinance loan applications, 10.9 million purchase loan applications and 2.5 million home improvement loan requests. The number of reported applications and purchased loans was down about 6 percent from 2005, driven in large part by a 12 percent decline in refinance applications. The 8,886 reporting lending institutions -- including 3,900 commercial banks, 946 savings institutions, 2,036 credit unions and 2,004 mortgage companies -- ma...