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New Study Finds Racial, Ethnic Disparities in Mortgage Lending

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Black and Latino home buyers in Long Island are more likely than whites to be denied home loans or be offered high-interest mortgages, even when controlling for income and community, according to a new study by Hofstra’s National Center for Suburban Studies and Long Island Housing Services.

The study, An Uneven Road to Recovery: Place, Race, and Mortgage Lending on Long Island, found that in 2012, blacks were 1.5 times more likely to be denied mortgages than whites, while Latinos were 1.3 times more likely to be denied.

Researchers examined federal mortgage lending data from 2005-2012, revealing that while Long Island has rebounded from the depths of the housing crisis, the recovery is sluggish and uneven, with home ownership rates lower than they were in 2000.

“If you speak to folks living and working on Long Island, the recovery hasn’t fully arrived,” said Dr. Christopher Niedt, PhD, a sociology professor, academic director of the National Center for Suburban Studies and co-author of the study. “The subprime boom and bust had clear racial and ethnic contours and so, too does the recovery.”

The study was released as part of a day-long symposium on fair housing and lending that featured keynote addresses from Gustavo Velasquez, Assistant Secretary for Fair Housing and Equal Opportunity at the federal Department of Housing and Urban Development, and Kristen Clark, Chief of the Civil Rights Bureau for the state Attorney General’s office.

The study was authored by Niedt and Dr. Marc Silver, PhD, a sociology professor, and included maps by Dr. Sandra Garren, PhD, assistant professor of Geology, Environment and Sustainability.

“These findings are not an anomaly compared to the nation,” Silver said. “We find these patterns very troubling.”

Researchers also studied mortgage denial rates by community, finding that in 2011 and 2012, a community’s denial rate increased one percent for every one percent increase in minority representation. The study also examined communities where conventional mortgage lending is lowest. These communities include 63 percent of Long Island’s Black and African American residents, and half of its Latino residents.

“Our next objective is to use this report’s findings to educate people about discriminatory lending and ensure that people who encounter discrimination reach out to Long Island Housing Services or other fair housing enforcement agencies to guarantee these practices end,” said John Batanchiev, staff attorney for Long Island Housing Services.

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