The Fargo Forum reports in its Sunday edition that one out of every four Native Americans in Minnesota is denied when seeking home mortgage loans. In North Dakota, the rate is one out of three.
The Forum analyzed a database containing records of 34,373 home loan applications made in North Dakota and 537,288 filed in Minnesota last year, as reported under the federal Home Mortgage Disclosure Act (HMDA). The 2006 findings are the most recent available.
The records consisted of applications for home purchase, home improvement and refinancing.
But why is the rate so high?
Poverty would appear to be one reason. The adult poverty rate for Native Americans is about 33 percent, triple the rate for whites.
Not surprisingly, the denial rate for applicants overall is increasing. Last year the denial rate was 29 percent in the U.S.
According to the Washington Post…
“Black borrowers received high-cost loans 52.8 percent of the time when they refinanced home loans last year, vs. 49.3 percent in 2005, the Fed report said. Hispanic borrowers received high-cost refinancings 37.7 percent of the time, up from 33.8 percent in 2005. The rate for white borrowers was 25.7 percent last year, compared with 21 percent in 2005.”
A Federal Reserve Board report (pdf) also points out that even when minorities are able to get loans, the costs associated with them are higher than for whites.