A coalition of community reinvestment organizations has released a study ranking lending institutions based on mortgage loans made to underserved borrowers.
The National Community Reinvestment Coalition (NCRC) released yesterday, America's Best and Worst Lenders: A Consumers' Guide to Lending in 25 Metropolitan Areas.
The study, which ranks banks, thrifts, mortgage companies and credit unions, was based on the percentage of home purchase and refinance loans made to minorities, women, and low- and moderate-income borrowers and neighborhoods. The rankings are based on performance during 2000 and 2001
Ranking best among prime lenders were Bank of America, Fleet National Bank, and Irwin Mortgage. For refinances, Bank One and First Union were ranked highest.
NCRC ranked ABN AMRO, Cendant Mortgage, and Ohio Savings Bank among the worst prime lenders.
The study found that non-prime lending increases faster than prime lending in minority and low- and moderate-income neighborhoods as the level of segregation increases and as housing becomes more affordable on a metropolitan level.
"It is profoundly troubling that non-prime lending surges as communities become more segregated by race," said John Taylor, president of NCRC. "This is one more piece of evidence that a segment of non-prime institutions is predatory and takes advantage of vulnerable communities confronted with fewer product choices."
A recent analysis from Association of Community Organizations for Reform Now found that in 2001, minority applicants for conventional loans were more likely to be denied for loans than whites even when controlling for income, and that disparity increased the higher the economic level grew.
"A veil of secrecy shrouds the practices of too many lending institutions in America," Taylor added. "We call on Congress to include loan terms and conditions in the publicly available home loan data so we can really see what types of loans are available to underserved communities."