Updated May 9, 2005 - See El
Diario editorial, HITN.tv
4/28, Crain's
5/2, NYT 5/4
May 2, 2005
Inner City Press / Fair Finance Watch Completes
Analysis of Twelve Largest Lenders’ Mortgage Disparities
The twelve largest lenders are to varying degrees disparate by race in distributing
their high cost loans, a comprehensive nationwide analysis by Inner City Press / Fair
Finance Watch (ICP) shows. ICP has submitted
this evidence and demands for action to federal regulators as well as to the states.
ICP has now reviewed the 2004 Home Mortgage Disclosure Act data of the twelve
largest lenders. ICP has compared each of these, including not only denial rates but also
the new information concerning which loans are subject to a rate spread (3% higher than
comparable Treasuries on a first lien, and 5% on a subordinated lien), and has found and
submitted to regulators and attorneys general in over thirty states the following (only
the first five are annotated; for more, contact us) --
Citigroup -- Whites: 482,844
applications, leading to 136,420 denials (28.25% denied) and 238,919 originations; 60,109 [or 25.16 percent] exceeded rate
spread.
African
Americans: 94,908 applications, leading to 41,634 denials (43.87% denied, 1.55
times higher than whites) and 32,897 originations; 17,722
[or 54.02 percent] exceeded rate spread [2.15 times higher / more likely to be over
rate spread than whites].
Latinos: 86,181
applications, leading to 32,421 denials (37.62% denied, 1.33 times higher than whites) and
32,252 originations; 11,172 [or 34.64 percent] exceeded
rate spread [1.38 times higher / more likely to be over rate spread than whites].
ICP has also provided evidence of Citigroup’s violation of its commitment to
have stopped, from January 2003 onward, making loans covered by the Home Ownership
and Equity Protection Act of 1994 (eight full percent over Treasuries on a first lien
mortgage, ten percent over Treasuries on a subordinate lien). In the 2004 data, ICP has found that Citigroup
reported fully 837 HOEPA loans. ICP raised
this to Citigroup’s senior management at the April 19 shareholders’ meeting at
Carnegie Hall in Manhattan. Neither Citigroup chairman Sandy Weill nor CEO Charles Prince
would directly answer the question. Citigroup chief operating officer Robert Willumstad
directly denied that Citigroup had reported HOEPA loans in its 2004 data. ICP has now
submitted the specifics of Citigroup’s 837 HOEPA loans to the attorneys general in
the states in which these super high cost loans were made. See, www.innercitypress.org/citi.html
HSBC [including HSBC Bank, HSBC Mortgage, HFC,
Beneficial and Decision One] --Whites: 853,148 applications, leading to 354,914
denials (41.60% denied) and 207,028 originations; 66,757
[or 32.25] exceeded rate spread.
African
Americans: 194,547 applications, leading to 96,163 denials (49.43% denied, 1.19
times higher than whites) and 34,905 originations; 16,530
[or 47.36 percent] exceeded rate spread [1.47 times higher / more likely to be over rate
spread than whites].
Latinos: 131,034
applications, leading to 59,983 denials (45.78% denied, 1.10 times higher than whites) and
28,067 originations; 10,080 [or 35.91 percent] exceeded
rate spread [1.11 times higher / more likely to be over rate spread than whites].
HSBC’s
response to its disparities has most recently been to claim, to the London Sunday Times of
May 1, that “anybody who knew the bank would ‘know that we are entirely
color-blind and the only criterion we use for lending around the world is
affordability.’” See, www.timesonline.co.uk/article/0,,2095-1592396,00.html
Ameriquest
-- Whites: 1,267,121 applications, leading to 281,808 denials (22.24% denied) and 338,800 originations; 179,665 [or 53.03 percent] exceeded rate
spread.
African Americans: 246,568 applications, leading to 64,566 denials (26.19% denied,
1.18 times higher than whites) and 67,586 originations;
43,847 [or 64.88 percent] were at rate spread [1.22 times higher / more likely to be over
rate spread than whites].
Latinos: 237,824 applications, leading to 43,971 denials (18.43% denied, 0.83 times
“higher” than whites) and 83,405 originations;
43,625 [or 52,31 percent] at rate spread [0.99 times higher / more likely to be over rate
spread than whites].
ICP notes: “That Ameriquest, the increasingly discredited subprime
lender admittedly under investigation by twenty five states, in 2004 made the most loans
to African Africans, both over the high cost rate spread and overall, is a reflection of a
two-tier financial system, one which is separate and unequal, including as to interest
rate. We have asked for more than twenty five states to take action on Ameriquest.”
And see LA Times of March 15, 2005.
Wells
Fargo -- Whites: 1,105,186 applications, leading to 175,845 denials (15.91%
denied) and 751,757 originations; 57,395 [or 7.63 percent]
exceeded rate spread.
African Americans: 106,662 applications, leading to 31,957 denials (29.96% denied,
1.88 times higher than whites) and 55,240 originations;
13,447 [or 24.34 percent] exceeded rate spread [3.19 times higher / more likely to be over
rate spread than whites].
Latinos: 144,442 applications, leading to 42,653 denials (29.53% denied, 1.86 times
higher than whites) and 74,4999 originations; 8626 [or
11.58 percent] exceeded rate spread [1.52 times higher / more likely to be over rate
spread than whites].
ICP
has received more and more complaints about Wells Fargo, including about Wells’
stealth America’s Servicing Company unit. Wells Fargo is also a major funder of
payday lenders, including targeters of military personnel like Armed Forces Loans.”
ICP has raised this directly to Wells Fargo, and to the Federal Reserve on Wells’
proposal to acquire First Community Capital Corp., which was announced back on September
2, was challenged by ICP on November 1, and which still remains pending, more than five
months later.
JP
Morgan Chase (based on the “Super
LAR” JPMC provided) -- Whites: 574,773 applications, leading to 152,001
denials (26.45% denied) and 334,627 originations; 19,527
[or 5.84 percent] exceeded rate spread.
African Americans: 73,434 applications, leading to 32,124 denials (43.75% denied,
1.65 times higher than whites) and 31,475 originations;
4594 [or 14.60 percent] exceeded rate spread [2.50 times higher / more likely to be over
rate spread than whites]
Latinos: 91,071 applications, leading to 31,932 denials (35.06% denied, 1.33 times
higher than whites) and 46,304 originations; 3220 [or 6.95
percent] exceeded rate spread [1.19 times higher / more likely to be over rate spread than
whites].
J.P.
Morgan Chase is also a major funder of payday and car title lenders, as ICP has previously
documented. See, e.g., the Columbus Dispatch of
April 15, 2004, “Group Opposes Bank One Sale: Business with Predatory Lenders a
Concern,” in which the bank’s spokesman confirmed his “aware[ness] of
concerns about the type of businesses that Inner City Press cited.” No changes,
however, have been announced by the bank from last April to this. J.P. Morgan Chase is,
like HSBC, a major purveyor of tax Refund Anticipation Loans and other high-cost fringe
financial services products.
Washington Mutual -- Whites: 634,449
applications, leading to 133,120 denials (20.98% denied) and 428,973 originations; 27,455 [or 6.40 percent] exceeded rate
spread
African Americans: 73,305 applications, leading to 24,780 denials (33.80% denied,
1.61 times higher than whites) and 40,586
originations; 8472 [or 20.87 percent] exceeded rate spread [3.26 times higher / more
likely to be over rate spread than whites]
Latinos: 116,253 applications, leading to 33,076 denials (28.45% denied, 1.36 times
higher than whites) 75,450 originations; 10,000 [or 13.25
percent] exceeded rate spread [2.07 times higher / more likely to be over rate spread than
whites]
Countrywide -- Whites: 998,348
applications, leading to 147,139 denials (14.74% denied) and 658,863 originations; 67,748 [or 10.28 percent] exceeded rate
spread
African Americans: 112,878 applications, leading to 22,888 denials (20.28% denied,
1.38 times higher than whites) and 62,096 originations;
16,285 [or 26.23 percent] were at rate spread [2.55 times higher / more likely to be over
rate spread than whites]
Latinos: 183,633 applications, leading to 32,536 denials (17.72% denied, 1.20 times
higher than whites) and 110,356 originations; 18,280 [or
16.56 percent] at rate spread [1.61 times higher / more likely to be over rate spread than
whites]
National City -- Whites: 505,278
applications, leading to 52,805 denials (10.45% denied) and 361,325
originations; 44,147[or 12.22 percent] exceeded rate spread
African Americans: 77,084 applications, leading to 12,857 denials (16.68% denied,
1.60 times higher than whites) and 48,448 originations;
12,163 [or 25.11 percent] were at rate spread [2.06 times higher / more likely to be over
rate spread than whites]
Latinos: 82,972 applications, leading to 10,969 denials (13.22% denied, 1.27 times
higher than whites) and 53,345 originations; 8512 [or 15.96
percent] at rate spread [1.31 times higher / more likely to be over rate spread than
whites]
Bank of America, N.A. (not including
Fleet, acquired in 2004) -- Whites: 467,778 applications, leading to 78,955 denials
(16.88% denied) and 339,060 originations; 1368 [or 0.40
percent] exceeded rate spread
African Americans: 45,165 applications, leading to 14,862 denials (32,91% denied,
1.91 times higher than whites) and 25,579 originations; 148
[or 0.58 percent] were at rate spread [1.44 times higher / more likely to be over rate
spread than whites]
Latinos: 101,884 applications, leading to 33,214 denials (32,60% denied, 1.93 times
higher than whites) and 58, 966 originations; 603 [or 1.02
percent] at rate spread [2.54 times higher / more likely to be over rate spread than
whites]
ABN Amro -- Whites: 278,572
applications, leading to 12,716 denials (4.56% denied) and 202,452
originations; 553 [or 0.27 percent] exceeded rate spread
African Americans: 14,473 applications, leading to 2,333 denials (16.12% denied,
3.54 times higher than whites) and 6878 originations; 78
[or 1.13 percent] were at rate spread [4.19 times higher / more likely to be over rate
spread than whites]
Latinos: 16,565 applications, leading to 1,391 denials (8.40% denied, 1.84 times
higher than whites) and 10,221 originations; 30 [or 0.29
percent] at rate spread [1.84 times higher / more likely to be over rate spread than
whites].
U.S. Bancorp -- 136,908 applications,
leading to 30,779 denials (22.48% denied) and 87,316
originations; 6032 [or 6.91 percent] exceeded rate spread.
African Americans: 9297 applications, leading to 3782 denials (40.68% denied, 1.81
times higher than whites) and 41191 originations; 533 [or
12.94 percent] were at rate spread [1.87 times higher / more likely to be over rate spread
than whites].
Latinos: 7799 applications, leading to 2907 denials (37.27% denied, 1.66 times
higher than whites) and 3664 originations; 300 [or 8.19
percent] at rate spread [1.19 times higher / more likely to be over rate spread than
whites].
Royal Bank of Canada -- Whites: 74,387
applications, leading to 5740 denials (7.72% denied) and 58,173
originations; 1971 [or 1.84 percent] exceeded rate spread.
African Americans: 4767 applications, leading to 612 denials (12.84% denied, 1.66
times higher than whites) and 3451 originations; 255 [or
7.39 percent] were at rate spread [3.99 times higher / more likely to be over rate spread
than whites].
Latinos: 8376 applications, leading to 870 denials (10.39% denied, 1.35 times
higher than whites) and 6105 originations; 163 [or 2.67
percent] at rate spread [1.45 times higher / more likely to be over rate spread than
whites].
ICP has also requested action, from federal regulators and now over thirty state
attorneys general, on lenders who have refused to provide data, and who otherwise enable
predatory lenders: Royal Bank of Scotland and other
subprime facilitators and securitizers (as reported in the London Sunday Times of May 1),
Lehman Brothers, AIG / American General and Fremont Investment & Loan (these three and
others have refused to provide their data in analyzable form), as well as last but far
from least Ameriquest, the increasingly discredited nationwide subprime lender
which troublingly made the most loans to African Africans in 2004, both over the rate
spread and overall, a reflection of a two-tier financial system: separate and unequal,
including as to interest rate.
ICP's book on these topics, "Predatory Bender"
CL
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Diario editorial, and on HITN.tv
on 4/28;
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