Mortgage data reveals disparities in Asian American and Pacific Islander lending

New research has revealed for the first time that some Asian American and Pacific Islander (AAPI) mortgage borrowers are paying far more for their loans than others. 

The research, from the National Community Reinvestment Coalition (NCRC), sheds new light on the experience of several groups within the AAPI community that have long accused lenders of predatory practices and discrimination.

Among the findings of this new report, Asian Indian and Chinese borrowers were often welcomed by banks that offered low interest rates and closing fees. Meanwhile, other AAPI groups such as Native Hawaiians, Filipinos and Vietnamese often found themselves with higher-cost loans offered by mortgage companies.

The findings were based on Home Mortgage Disclosure Act (HMDA) data collected in 2018. That year, for the first time, the government required banks to categorize loan applicants by country of origin. 

While many studies have explored the disparate treatment of Black and Hispanic loan applicants, the 2018 data revealed evidence that some AAPI communities also experienced differences in treatment and higher costs.

These additional costs have consequences, as these communities will find it harder to build wealth. Prior to the collection of this disaggregated data the experience of these groups was largely invisible.

The new analysis comes as lenders continue to argue that collecting such data is an unnecessary burden. This summer, the Consumer Financial Protection Bureau issued a new rule that could curtail the collection of this data. If this happens, it will be yet another example of the Trump Administration attempting to obfuscate evidence of disparate impact on people of color.

What is clear is that AAPI borrowers were willing to identify themselves, with 60% of Asian applicants reporting their national origin, despite lender claims that it is burdensome.

“Our report shows that borrowers are willing to provide data that lenders want to hide, and the data analysis shows why lenders want to hide it, because it shows that some Asian and Pacific Islander homebuyers wound up with significantly higher-cost home loans,” said Jesse Van Tol, CEO of NCRC. “Instead of trying to undo these new reporting requirements, lenders should focus on rooting out racial and ethnic discrimination and pricing differences. They should improve their products and outreach so that all hard working people have the opportunity to purchase a home, a fundamental stepping stone to building long-term familial wealth.”

“The findings of this analysis of the 2018 HMDA data report confirms what National CAPACD has long been advocating for over a decade: Asian Americans and Pacific Islanders represent diverse ethnicities, migration and settlement patterns, histories, and socioeconomic experiences,” said Seema Agnani, executive director of National CAPACD. “Aggregate racial data about AAPIs renders the realities of many ethnic groups within our community invisible. This was very evident during the 2008 foreclosure crisis when certain AAPI ethnic groups were disproportionately targeted by predatory lenders, destabilizing entire neighborhoods, with no publicly available data to inform an effective response. This analysis further underscores the alarming variation of lending options available to hopeful AAPI homebuyers and homeowners when disaggregated by ethnicity, age and income. Data that captures a more nuanced and accurate picture of AAPIs, as well as other racial groups, is absolutely critical to addressing racial inequities and the systemic racism that is built into the housing industry.”

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Media Contacts:

NCRC
Alyssa Wiltse
540-270-6810
awiltse@ncrc.org

National CAPACD
Nahida Uddin
347-283-1757
nahida@nationalcapacd.org

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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

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