Minorities found less likely to gain mortgage approval than whites

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Blacks were more than twice as likely to be turned down for mortgages as white applicants, and Latinos were rejected almost one and a half times more often than whites, according to the Association of Community Organizations for Reform Now (ACORN), an advocacy group for low- and moderate-income families.

The report analyzed data about the lending activities of more than 7,800 institutions from 50 metropolitan areas.

Some cities have particularly bad track records. Blacks were more than four times more likely to be denied a conventional mortgage than whites in Milwaukee and Chicago last year, ACORN said.

Some 74 percent of white families owned their homes in the US last year, but only 48 percent of blacks and 46 percent of Latinos owned theirs.

The disparity between white and black mortgage applicants' acceptance rates widened as incomes rose, ACORN said. Wealthy blacks were turned down almost three times more than wealthy whites last year. Wealthy blacks also were rejected more frequently than whites whose incomes were only about half as much as those of the black applicants, it said.

The study added that banks appear much more willing to loan money to minorities when the government guarantees they will not take a loss on the loan.

Blacks and Latinos did get an increased number of some kinds of loans last year, ACORN said. The number of conventional purchase loans made to Latinos rose 14.1 percent and the number of conventional loans to blacks rose 1.3 percent compared with 1999, the group said.

But blacks received only 4.7 percent of all conventional loans last year, even though they make up more than 12 percent of the US population. Latinos, who make up almost 13 percent of the population, received just 6 percent of loans.

Poor and black home buyers have become increasingly reliant on sub-prime loans to buy homes in recent years, ACORN said. These loans, aimed at people with poor credit histories, are more expensive than conventional mortgages.

"Precisely because traditional banks and mortgage companies have excluded too many lower income and minority families from the economic mainstream, and failed to provide the necessary credit, this need has been filled by sub-prime lenders offering loans with higher interest rates, more fees, and less beneficial terms," ACORN wrote in the study.