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Minorities getting more mortgages, fewer loan denials, new study says

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WASHINGTON (AP) — A higher percentage of Blacks, Hispanics and American Indians were approved for home mortgages last year than in 1998, new government data show. Although they were still turned down more often than whites, regardless of income, their loan denial rates declined from a year earlier.

Low- and moderate-income borrowers also made gains, according to the latest annual survey of 7,833 banks, savings and loans, credit unions and mortgage companies.

But a group that lobbies for greater availability of credit in poor neighborhoods suggested that some of the increase in mortgage lending to minorities may have come from loans with unfairly high interest rates and fees.

"We must know more about the nature of this lending spike to the underserved," said John Taylor, president and chief executive officer of the National Community Reinvestment Coalition.

The data released Tuesday by the Federal Financial Institutions Examination Council do not include interest rates or other loan terms. The council is comprised of the bank regulatory agencies, including the Federal Reserve and the Federal Deposit Insurance Corp.

In a statement, Taylor noted that so-called predatory lending has been on the rise in poor and minority neighborhoods. There has been increasing public criticism in recent months of the practice, in which some lenders seek out low-income, minority and elderly borrowers and charge them what are considered excessive interest rates and fees.

Nonetheless, Taylor said, "We are pleasantly surprised by the 1999 figures."

They showed that the number of home mortgage loans, both conventional and those backed by government guarantees, issued last year to American Indians jumped 44.4 percent from 1998. For Hispanics, it rose 18.3 percent; for blacks, it was up 11.1 percent; for Asian Americans, it increased 16.3 percent. For whites, the figure edged up 1.7 percent.

Blacks, Hispanics and American Indians, however, continued to be rejected for mortgage loans more often than whites, though their denial rates declined from 1998, the survey showed. The denial rate for Asian Americans was unchanged at 11.8 percent.

Denial rates were 49 percent for blacks, down from 53.7 percent in 1998; 42.1 percent for American Indians, down from 52.9 percent; 35 percent for Hispanics, down from 38.7 percent; and 25.5 percent for whites, down from 26 percent.

Low- and moderate-income borrowers received nearly 26 percent of all conventional mortgage loans, up from 24 percent in 1998.