Mortgage lenders – including banks, savings associations, credit unions, and mortgage companies – made progress in terms of boosting the share of loans to Black, Hispanic and Asian borrowers in 2023, according to data collected in the Home Mortgage Disclosure Act (HMDA) database.
In terms of borrower race and ethnicity, the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose slightly from 8.1% in 2022 to 8.2% in 2023, as per a report from the Federal Financial Institutions Examination Council (FFIEC).
The share made to Hispanic-White borrowers increased from 9.1% to 9.9%, and the share made to Asian borrowers increased slightly from 7.6% to 7.7%.
In 2023, Black or African American and Hispanic-White applicants experienced denial rates for first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans of 16.6% and 12.0% respectively. Denial rates for Asian and non-Hispanic-White applicants were 9.0% and 5.8% respectively.
For 2023, the number of reporting institutions increased by about 14.6% from 4,460 in the previous year to 5,113.
The 2023 data include information on 10 million home loan applications, a decrease from the 14.3 million reported in 2022. Among them, 7.7 million were closed-end (e.g., a home mortgage loan) and 2.1 million were open-end (e.g., a home equity line of credit).
Another 266,000 records are from financial institutions making use of statutory partial exemptions and did not indicate whether they were closed-end or open-end.
The share of mortgages originated by non-depository, independent mortgage companies accounted for 63.1% of first lien, one- to four-family, site-built, owner-occupied closed-end home-purchase loans in 2023, up from 60.2% in 2022.
Photo: Dane Deaner