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Best Minority Lenders

Lending Industry Diversity Conference releases ranking

October 13, 2005


photo of Coco Salazar

Mortgage lenders face constant criticism from the press over lending to minorities. But five lenders were recently recognized for their superior performance in lending to minorities.

The Lending Industry Diversity Conference Inc. announced last week the winners of its inaugural Best in Industry Awards for 2005, which were created to acknowledge companies and individuals who have demonstrated superior performance in minority lending, higher minority origination rates and minority market penetration.

Lending Industry says it is a nonprofit, Washington, D.C.-based corporation founded by ComplianceTech to promote social welfare and to conduct conferences promoting the link between racial and ethnic diversity in the workforce, as well as in lending/credit allocation, among other reasons.

ComplianceTech consults mortgage companies.

"We have observed a positive relationship between lenders who run a 'tight ship' in terms of underwriting and quality control and those who excel in terms of fair lending," says ComplianceTech managing director Mike Taliefero in the announcement. "These lenders look at 'fair lending' as a business opportunity and not a regulatory burden."

The winners were reportedly picked based on the recently released 2004 Home Mortgage Disclosure Act data.

Countrywide Home Loans, which is the nation's top originator, earned the Best in Minority Lending Award (Large Company) because it was the large mortgage lender that made the most loans to minorities. Large lenders were those with more than 50,000 HMDA applications in 2004, Lending Industry said.

The Calabasas, Calif.-based lender may possibly pick up more minority loan volume this year due to its recent cosponsorship of a home makeover reality show on Telemundo, a U. S. Spanish-language network. Countrywide said the campaign was designed to educate Spanish-speaking viewers on the process of qualifying and obtaining a home loan while capturing their attention with a makeover of one of the rooms in the home or a new outside landscape design.

Amongst entities operating primarily in the United States with 50,000 or less HMDA applications, the Best in Minority Lending Award (Small- to Medium-Sized Company) went to Franklin American Mortgage, according to the announcement.

Bank of America earned the Best in Minority Market Penetration Award, which recognizes the lender that has the greatest proportion of minority HMDA-reported applications compared to the national minority population proportion according to the 2000 census. Eligible candidates for the award needed to have reported at least 50,000 HMDA applications, be a prime lender, and report no more than 10% of total applications as race unknown, Lending Industry said.

The Best in Minority Origination Rate Award (Prime Lender) went to Chase Manhattan Mortgage because, among the top 50 prime lenders to minorities last year, it had the highest rate of minority originations as a percentage of total minority applications. Lender Industry says a higher minority origination rate suggests lower minority denial and fallout rates.

Chase Home Finance, which is also under JPMorgan & Chase's umbrella, recently partnered with a California real estate firm to offer a hybrid, high-LTV mortgage designed to meet the needs of Hispanic borrowers.

Amongst the top 50 nonprime minority lenders, the one with the highest rate of funded minority originations as a percentage of total minority applications was GreenPoint Mortgage Funding. For that reason, it earned the Best in Minority Origination Rate Award (Nonprime Lender).

"All of the lenders who are among the finalists are among the best in the industry but those who are being acknowledged are the best of the best in the performance year of 2004," says Maurice Jourdain-Earl, founder of ComplianceTech.

The move is part of the company's plan to deepen its presence in Los Angeles as it is the largest and fastest growing market in which it operates, reported Wells. The expansion includes the opening of at least 25 new banking centers that will give room for over 300 additional jobs. Half of the centers will be located in multicultural concentrated communities as this is where Wells says it sees increasing demand for financial services.

Amongst the lenders that have implemented programs to reach out to the Hispanic market is Wells Fargo. The San Francisco-headquartered banking behemoth's business prospered when it started accepting the Mexican matricula card as valid identification a few years ago. Last year, it opened six new centers in low-to-moderate income and multicultural areas of Los Angeles -- where a flood of accounts were opened subsequent to matricula acceptance -- with plans to hire over 100 home loan consultants.

The winners were scheduled to be recognized at the first annual "Best in Industry" Awards Dinner, held in conjunction with the First Annual Mortgage Lending Industry Diversity Conference last week in Arlington, Va.

Lending Industry said it was the lead organizer of the conference.

Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.

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