Updated May 30, 2005 - See, “House of pain: New
York, Florida are looking into unfair terms for minorities,” by Richard Burnett,
Orlando Sentinel, May 29, 2005, Pg. H1
May 23, 2005
2004 Mortgage
Disparities in the Sunshine State: Inner City Press / Fair Finance Watch Completes
Analysis of Nine Largest Lenders’ Recent Data, Submits Analysis to Florida Attorneys
General’s Office
May 23 -- The nine largest lenders in
Florida are to varying degrees disparate by race in distributing their high cost loans, an
analysis now submitted to the Florida Attorney General’s Office by Inner City Press /
Fair Finance Watch (ICP) shows.
ICP has now comprehensively reviewed the 2004 Home Mortgage Disclosure Act data of
the nine 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 the Florida Attorney General the following:
Citigroup -- Whites: 35,194
applications, leading to 9438 denials (26.81% denied) and 17,786
originations; 3557 [or 20.0%] exceeded rate spread.
African Americans: 8061 applications, leading to 3338 denials (41.41% denied, 1.54
times higher than whites) and 2831 originations; 1410 [or
49.81 percent] exceeded rate spread [2.49 times higher / more likely to be over rate
spread than whites].
Latinos: 8484 applications,
leading to 2784 denials (32.81% denied, 1.22 times higher than whites) and 3574 originations; 708 [or 19.81 percent] exceeded rate spread
[0.99 times “higher” / more likely to be over rate spread than whites].
ICP has also found 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 Attorney General in
Florida, where more than a dozen of the non-compliant HOEPA loans were made by Citigroup.
HSBC [including HSBC Bank, HSBC Mortgage,
HFC, Beneficial and Decision One]
Whites: 45,600 applications,
leading to 16,281 denials (35.70% denied) and 12,682
originations; 4,804 [or 37.88%] exceeded rate spread.
African Americans: 12,849 applications, leading to 5719 denials (44.51% denied,
1.25 times higher than whites) and 2,749 originations;
1,360 [or 49.47 percent] exceeded rate spread [1.31 times higher / more likely to be over
rate spread than whites].
Latinos/Hispanics: 11,861
applications, leading to 4189 denials (35.32% denied, 0.99 times “higher” than
whites) and 3576 originations; 1527 [or 42.70 percent]
exceeded rate spread [1.13 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
Bank of America -- Whites: 71,900
applications, leading to 15,798 denials (21.97% denied) and 48,174
originations; 123 [or 0.26%] exceeded rate spread.
African Americans: 7740 applications, leading to 3068 denials (39.64% denied, 1.80
times higher than whites) and 3882 originations; 14 [or
0.36 percent] exceeded rate spread [1.38 times higher / more likely to be over rate spread
than whites].
Latinos: 16,987 applications,
leading to 5612 denials (33.04% denied, 1.50 times higher than whites) and 9501 originations; 19 [or 0.2 percent] exceeded rate spread [0.77
times “higher” / more likely to be over rate spread than whites].
Beyond mortgage
lending, in which Bank of America has de-emphasized subprime lending since, after extended
advocacy by ICP and others, BofA closed its NationsCredit unit, Bank of America is a major
funder of payday lenders including Advance America Cash Advance and others.
Washington Mutual -- Whites: 57,276
applications, leading to 12,540 denials (21.89% denied) and 37,986
originations; 2785 [or 7.33%] exceeded rate spread.
African Americans: 6882 applications, leading to 2506 denials (36.41% denied, 1.66
times higher than whites) and 3600 originations; 710 [or
19.72 percent] exceeded rate spread [2.69 times higher / more likely to be over rate
spread than whites].
Latinos: 19,300 applications,
leading to 5101 denials (26.43% denied, 1.21 times higher than whites) and 11,932 originations; 1462 [or 12.25 percent] exceeded rate spread
[1.67 times higher / more likely to be over rate spread than whites].
Wells Fargo -- Whites: 71,777
applications, leading to 10,071 denials (14.03% denied) and 50,226
originations; 2636 [or 5.25%] exceeded rate spread.
African Americans: 6694 applications, leading to 1922 denials (28.71% denied, 2.05
times higher than whites) and 3589 originations; 855 [or
23.82 percent] exceeded rate spread [4.54 times higher / more likely to be over rate
spread than whites].
Latinos: 18,729 applications,
leading to 2636 denials (20.71% denied, 1.48 times higher than whites) and 7754 originations; 378 [or 4.87 percent] exceeded rate spread
[0.93 times “higher” / more likely to be over rate spread than whites].
Regarding
Wells Fargo, 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.
Wachovia / SouthTrust -- Whites: 47,004
applications, leading to 10,627 denials (22.61% denied) and 26,558
originations; 1754 [or 6.6%] exceeded rate spread.
African Americans: 4996 applications, leading to 1896 denials (37.95% denied, 1.68
times higher than whites) and 2101 originations; 202 [or
9.61 percent] exceeded rate spread [1.46 times higher / more likely to be over rate spread
than whites].
Latinos: 9206 applications,
leading to 3014 denials (32.74% denied, 1.45 times higher than whites) and 4114 originations; 254 [or 6.17 percent] exceeded rate spread
[0.93 times “higher” / more likely to be over rate spread than whites].
Beyond its filings with forty-nine state attorneys general, ICP is also commenting
to, and also litigating Freedom of Information Act issues against, federal agencies like
the Federal Reserve Board, in connection with Wachovia’s support of payday lenders
and other fringe financial institutions, see, e.g.,
Dow Jones of October 25, 2004, “Community Group: Fed Must Reconsider
Wachovia-SouthTrust”).
JP Morgan Chase -- Whites: 58,177
applications, leading to 9984 denials (17.16% denied) and 40,824
originations; 1725 [or 4.23%] exceeded rate spread.
African Americans: 6360 applications, leading to 1977 denials (31.08% denied, 1.81
times higher than whites) and 3627 originations; 436 [or
12.02 percent] exceeded rate spread [2.84 times higher / more likely to be over rate
spread than whites].
Latinos: 18,719 applications,
leading to 3623 denials (19.35% denied, 1.13 times higher than whites) and 12,762 originations; 544 [or 4.26 percent] exceeded rate spread
[1.01 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.
Countrywide -- Whites: 85,570
applications, leading to 15,175 denials (17.73% denied) and 54,850
originations; 6100 [or 11.12] exceeded rate spread.
African Americans: 8594 applications, leading to 1822 denials (21.2% denied, 1.2
times higher than whites) and 4659 originations; 1374 [or
29.49 percent] exceeded rate spread [2.65 times higher / more likely to be over rate
spread than whites].
Latinos: 24,395 applications,
leading to 5477 denials (22.45% denied, 1.27 times higher than whites) and 14,226 originations; 2881 [or 20.25 percent] exceeded rate spread
[1.82 times higher / more likely to be over rate spread than whites].
Ameriquest -- Whites: 120,873
applications, leading to 24,907 denials (20.61% denied) and 38,042
originations; 21,800 [or 57.31%] exceeded rate spread.
African Americans: 25,502 applications, leading to 5334 denials (20.92% denied,
1.02 times higher than whites) and 9028 originations; 5858
[or 64.89 percent] exceeded rate spread [1.13 times higher / more likely to be over rate
spread than whites].
Latinos: 35,807 applications,
leading to 6967 denials (19.46% denied, 0.94 times “higher” than whites) and 13,713 originations; 7869 [or 57.38 percent] exceeded rate spread
[1.02 times higher / more likely to be over rate spread than whites].
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 forty five states to take action on Ameriquest.
ICP has also requested action, from federal regulators and now state attorneys
general, including in Florida, on lenders who have refused to provide data in analyzable
form. These include AmSouth, SunTrust (strange “text” format) and Fifth Third
(pdf format only), 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. Click
here for ICP’s new Ameriquest
Watch.
ICP's book on these topics, "Predatory Bender"
CL
Review order / Amazon
For further information, click here to contact us
|
