Mortgage Lending in New England: Key Trends and Observations in 2012
Using the annual Home Mortgage Disclosure Act (HMDA) data, this report provides a brief overview of New England's mortgage lending activity in 2012 and further investigates the disparities in loan origination outcomes for borrowers of various incomes, races, and ethnicities. While the number of total originations for first-lien loans for owner-occupied homes increased by more than 38 percent from 2011, this surge in lending activity was primarily driven by a 48 percent growth in refinance originations, along with a modest push from a 16 percent increase in home-purchase loans. A more detailed analysis of the region's home-purchase and refinance lending dynamics for 2012 highlights significantly higher rates of denial for black and Latino borrowers than for white or Asian borrowers at every income level. Despite a slight increase in the proportion of conventional mortgages among all originated loans, low- and moderate-income (LMI) applicants were 2.6 times less likely to receive such loans than middle- and upper-income (MUI) consumers (24.3 percent vs. 63.3 percent). Racial and ethnic minorities are also overrepresented in the nonconventional, government-guaranteed loan market with higher interest rates, which has expanded substantially since the 2008 financial crisis.