HMDA data reveals refi boom during pandemic, but not for Black and Hispanic homeowners

Record-low interest rates created an opportunity for homeowners to lower their mortgage costs and build more personal wealth faster. But it was a bust for communities of color. Their share of refinance loans declined.

Independent mortgage companies expanded their dominance over banks for mortgage originations, and also dramatically increased their share of refinance lending, a new analysis of federal Home Mortgage Disclosure Act (HMDA) data found.

The analysis of 2020 HMDA data, from the National Community Reinvestment Coalition (NCRC), found that mortgage lending for home purchases remained strong during the COVID-19 pandemic, and refinance lending exploded, sparked by record low interest rates.

But the boom was more of a bust for Black and Hispanic homeowners. Their share of refinance loans declined, while the financial benefit of lower interest flowed mostly to White and Asian homeowners. The impact of this difference is likely an increase in the share of the racial wealth gap driven by differences in home equity.

Black and Hispanic homebuyers saw modest increases in their market share of home purchase loans, but were still far short of their population share or the increased lending needed to approach parity with the White homeownership rate

“The data reveals how even an economic boom and opportunity for homeowners to lower their mortgage costs turned out to be a bust for communities of color, who also disproportionately suffered from the pandemic and its economic consequences,” said NCRC President & CEO Jesse Van Tol. “The refinance boom did little to close the nation’s lingering racial wealth and homeownership gaps. The disparity in who benefited from low interest rates also raises questions about the capabilities of both lenders and regulators. Why didn’t they all do more to ensure communities of color reaped equal benefits from record low interest rates?

“NCRC has documented evidence of bias and discrimination in lending practices, even in the PPP program for small businesses during the pandemic. So now, buried in the data, we see yet another strong signal of bias in lending. It isn’t surprising. But it also isn’t acceptable. Whether the solution includes stronger enforcement of fair lending laws and principles by regulators, or better practices by lenders, or all of the above, the painful reality is that our nation’s housing finance system isn’t an even playing field. It works better for White and Asian families and worse for Black and Latino communities, and that needs to change.”

NCRC also found that a growing number of larger lenders did not report any demographic data, which signals a potential threat to the future usefulness of this critical national dataset.

The NCRC analysis of the HMDA data, which is collected by the Consumer Financial Protection Bureau (CFPB), found:

  • Refinance lending has increased substantially, from just 2.3 million loans in 2018 to 8.8 million in 2020.
  • Asian homeowners dramatically increased their share of all refinance loans, jumping from 4% of all refinances in 2018 to 7% in 2020. Meanwhile, Black and Hispanic borrowers lost market share, with Black homeowners falling from 5.6% of all refinances in 2018 to just 4.3% in 2020 while Hispanics fell from 8.4% to 7.8%. 
  • 62% of originations in 2020 were made by independent mortgage companies, an increase from 55% in 2018.
  • Average interest rates fell from 4.96% in 2018 to 3.31% in 2020. 
  • Black and Hispanic borrowers lost market share as a percent of all loans, falling from 5.9% to 5.2% and 9.9% to 9.2% respectively from 2019- 2020. These losses vary based on the purpose of the loan.
  • Loans lacking demographic information continue to increase. From 2018 to 2020, that figure has risen from 10.8% to 13.6% of all originations. When purchased loans are included, 22% of all loans reported in HMDA lack demographic data.

“HMDA data provides the most detailed evidence of discrimination in the U.S. mortgage market and helps policy makers and consumer advocates identify good and bad actors in the mortgage lending market,” said Jason Richardson, NCRC’s director of research and assessment. “Lenders that purchase a large proportion of their loans often remove demographic data from them, a loophole in HMDA that should be closed to protect the validity of the data. In addition, some lenders do a poor job at collecting demographic data on loan applications made on the internet. Both of these factors are a threat to this critical dataset, and should be addressed by the CFPB immediately.”

Read the full NCRC analysis at:

If you want to examine details of the mortgage lending activity in your community, NCRC offers its members access to the Fair Lending Report tool. Not a member? Join now.

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1 thought on “HMDA data reveals refi boom during pandemic, but not for Black and Hispanic homeowners”

  1. Easy solution. Make all future FHA loans auto-refi when rates fall. (Lower-only adjustable-rate mortgages (LO-ARMs))

    The Fed already owns 1/3 of all MBS, they could buy all the FHA LO-ARMs. And then, in the future, it would also make the Fed’s job easier. When the Fed lowers rates, it would have a quicker, broader, more equal impact on the economy.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

Complete the form to download the full report: