A state report issued Tuesday finds a “stark gap” in homeownership by Blacks and Latinos compared with whites statewide — and blames government and lenders for creating obstacles to mortgages.
State Attorney General Letitia James, whose office compiled the report, said whites own their homes at nearly double the rate of households headed by Blacks and Latinos. The report, “Racial Disparities in Homeownership,” concludes that mortgage lending practices have “prevented New Yorkers of color from purchasing homes and deepened wealth inequality.”
“These disparities are a significant contributor to the racial wealth gap and result in higher housing costs for homebuyers of color, making it harder for communities of color to build lasting financial security and overcome decades of systemic discrimination in the housing market,” James said.
Statewide, across all income and credit score ranges, Blacks and Latinos are denied mortgages at higher rates than whites, are charged higher interest rates and are less likely to be approved to refinance mortgages to a lower interest rate, the report concluded. It also found that Black and Latino mortgage applicants also are more likely to use Federal Housing Administration loans common for buyers who can’t secure a large enough down payment, but which include more fees.
WHAT TO KNOW
- A state report finds a “stark gap” in homeownership by Blacks and Latinos compared with whites statewide and faults government and lenders for creating obstacles to mortgages.
- State Attorney General Letitia James said whites own their homes at nearly double the rate of households headed by Blacks and Latinos.
- The report concludes that mortgage lending practices have “prevented New Yorkers of color from purchasing homes and deepened wealth inequality.”
Statewide, across all income and credit score ranges, Blacks and Latinos are denied mortgages at higher rates than whites, are charged higher interest rates and are less likely to be approved to refinance mortgages to a lower interest rate. the report concluded. It also found that Black and Latino mortgage applicants also are more likely to use Federal Housing Administration loans common for buyers who can’t secure a large enough down payment, but which include more fees.
“Even among borrowers with the highest credit scores, nonwhite mortgage applicants are denied a mortgage at nearly double the rate of white applicants,” the report said. “This economic punishment starves communities of resources and deprives borrowers of color of the power to amass wealth.”
There are parallels between the report and findings in Newsday’s “Long Island Divided” series.
In 2019, Newsday found evidence of widespread separate and unequal treatment of minority potential homebuyers and minority communities on Long Island. The three-year probe strongly indicated that house hunting in one of the nation’s most segregated suburbs poses substantial risks of discrimination, with black buyers chancing disadvantages almost half the time they enlist brokers. Additionally, the investigation revealed that Long Island’s dominant residential brokering firms helped solidify racial separations.
Taken together, the Newsday series and the attorney general’s report show Black and Latino would-be homeowners face barriers to homeownership ranging from shopping for a home to landing a mortgage.
The attorney general’s statewide report released Tuesday also singled out concerns on Long Island.
“Long Island shows a clear lack of applications [for mortgages] from neighborhoods of color at the western ends of both Nassau County and Suffolk County,” the report states. Black and Latino applicants on Long Island also were 37% more likely to be denied a loan than white applicants, the report said, although that rate was lower than the statewide rate of 49%. In addition, Black and Latino homeowners on Long Island were 20% more likely to be denied refinancing to a lower interest rate, the report stated. The statewide average was 24%.
The state Attorney General’s Office used several sources to draw its conclusions. The methodology included analysis of U.S. Census data for homeownership rates and neighborhood demographics; federal data collected under the Home Mortgage Disclosure Act that includes credit scores from lenders; data from the Department of Housing and Urban Development; and Federal Deposit Insurance Corp. data for the location of bank branches, and decisions made in those branches. Every step of the home-loan process was examined for disparities by analyzing mortgages sought, approved and rejected using the various agencies and databases, the office said.
The report also cites problems statewide.
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Read More: Mortgage obstacles for Blacks, Latinos create ‘stark’ homeownership gap, AG