African-American and Latino mortgage applicants were twice as likely to be turned down for a conventional loan last year as Whites, according to a review of data collected by Uncle Sam to prevent discrimination.

On average nationally, African Americans were 2.38 times as likely to be denied a conventional purchase money mortgage as Whites, while Latinos were rejected 1.63 times more often, the activist group ACORN said last week.

In both cases, moreover, last year's rejection rates were somewhat higher than the year before, according to the Association of Community Organizations for Reform Now's analysis of 115 metropolitan areas.

Even when controlling for income, minorities are rejected more often, the group's examination of data collected under the Home Mortgage Disclosure Act found. And in something of a surprise, the gap increased as the income of would-be borrowers went up.

"The continued disparity in access to mortgage loans cannot be explained away by the argument that minority applicants have less good credit," the ACORN report said.

Despite the differences in rejection rates, though, denial rates for conventional loans declined last year for borrowers of all races. Conventional mortgages are those which meet the strictest underwriting guidelines and come with the lowest possible interest rate.

Industry organizations tended to focus on that finding.

"Denial rates continue to decline for every race and income group," said James Eberle, a spokesman for America's Community Bankers. "That's progress, and lenders are doing as much as they can to encourage the trend."

Noting that the reasons cited most often in the HMDA data for rejecting mortgage applicants are a poor credit history and no credit history at all, Eberle said his members and other mortgage lenders are supporting financial literacy programs and encouraging would-be borrowers to "talk to lenders to learn what it takes to get into a home."

But ACORN President Maude Hurd said it is "outrageous" that minority borrowers are denied loans so much more frequently than their White counterparts.

"Lenders need to do better, and regulators and legislators need to demand more," she said.

ACORN found that the disparities in rejection rates were more severe as incomes increased.

For example, upper-income African Americans earning more than 120 percent of the median for their areas were denied 2.83 times more often than upper-income Whites. Latinos at the same income level were 2.71 times as likely as their White counterparts to be sent packing by conventional lenders.

Nationally, one out of three African-American applicants were rejected last year, an improvement from one in four in 2002, ACORN found. The rejection rate for Latinos also rallied, falling from one in four to one in five.

However, denial rates improved at an even faster clip among White borrowers, dropping from 17.2 percent to 12.5 percent.

ACORN said the inability to obtain financing is "a major factor" in the nation's ownership gap. Whereas 75 percent of Whites owned their homes at the end of last year, only 48 percent of African Americans and 47.5 percent of Latinos are owners.

If minority families owned homes at the same rate as Whites, the report said, there would be 3.2 million more owners.

Despite the differences in denial rates, the study found that the number of conventional mortgages to minorities increased last year, albeit more so to Latinos than African-Americans.

At the same time, though, it said the share of loans made to minorities "continues to lag far behind" their percentage of the overall population.

Whereas African-Americans comprise nearly 13 percent of the population, they received just 5.1 percent of the conventional purchase loans originated in 2002. Latinos also account for 13 percent of the population, yet they received only 8.5 percent of such loans last year.

In that home ownership is the "single most important source" for accumulating wealth, ACORN said "it is impossible to overstate the damage caused by the continuing inequities in access to mortgage credit."

With more than 150,000 member families organized into 700 neighborhood chapters in 60 cities, ACORN is the nation's largest community group of low and moderate-income people.

Published: October 22, 2003

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.