New HMDA Data Reveals Racial Disparities in Older Adult Lending

For the first time, the Consumer Financial Protection Bureau released Home Mortgage Disclosure Act (HMDA) data inclusive of age. The 2018 data, released in September 2019, is the first to include the ages of applicants and co-applicants, offering insight on the activity of older adult borrowers. 

NCRC’s new report, Mortgages and Older Adults After COVID-19, used this new information to highlight trends in homebuying, aging in place and use of home equity. From downsizing, making home modifications or needing additional resources to pay for healthcare costs or other expenses, that data showed that older adults are active in the homebuying and refinance markets.

Key Findings

  • 30% of mortgages in 2018 went to older adults.
  • 67% of older adults who took out mortgages were refinancing their homes and 68% of those used the mortgage to access the equity in their homes.
  • Older borrowers were Whiter than younger borrowers.
  • As with younger borrowers, there are racial disparities in interest rates charged to minority and White older borrowers.

Older adults play a critical role supporting the American mortgage market that COVID-19 has completely disrupted. While first time home buyers are often the focus in discussions about mortgage lending, it is older adults who refinance or take equity from their homes to finance retirement or aging in place that drive a third of US mortgages. Because of COVID-19, the primary ways they access that equity are in danger. This matters, and will have consequences that last far longer than the COVID-19 crisis itself.

The addition of age to the 2018 HMDA data releases offers a snapshot assessment of mortgages and borrowing in 2018 by age and a new means of understanding senior homeownership, financing and wealth. With subsequent years of data collection, we can gleam a longitudinal assessment of home mortgages amongst seniors and younger populations. The next HMDA release, of 2019 data, is expected in the late summer or early fall of 2020. Perhaps even more interesting is looking ahead and considering the impact of the 2020 COVID-19 pandemic on U.S. mortgages and 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

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