Discrimination in Loan Servicing David Berenbaum Chief Program Officer National Community Reinvestment Coalition Fair Housing 2010: Time to Act 2010 National Fair Housing Policy Conference U.S. Dept of Housing and Urban Development New Orleans, Louisiana July 2010

Foreclosure in the Nation’s Capital: How Unfair and Reckless Lending Undermines Homeownership The study’s findings are particularly significant because its controls for the most important factors used to determine risk during the origination process, including credit score, loan characteristics, neighborhood characteristics, and investor identifiers.

Foreclosure in the Nation’s Capital: How Unfair and Reckless Lending Undermines Homeownership

Foreclosure in the Nation’s Capital: How Unfair and Reckless Lending Undermines Homeownership The study finds that minorities are disproportionately affected by the foreclosure crisis, beyond levels that can be explained by objective criteria. It confirms that disparities in lending have a clear racial component that has not been adequately addressed through enforcement of the nation’s fair lending laws.

Foreclosure in the Nation’s Capital: How Unfair and Reckless Lending Undermines Homeownership FINDINGS: Nearly 35 percent of subprime loans were issued to borrowers who could have qualified for fixed-rate prime loans. Even controlling for other factors, Latinos were 70 percent more likely and African Americans 80 percent more likely than their white counterparts to receive a subprime loan. African Americans were almost 20 percent more likely and Latinos were 90 percent more likely than their similarly situated white counterparts to go into foreclosure.

Foreclosure in the Nation’s Capital: How Unfair and Reckless Lending Undermines Homeownership

HAMP Mortgage Modification Survey 2010 NCRC conducted a survey of distressed homeowners seeking assistance from NCRC’s Housing Counseling Network (HCN). Surveys were distributed to 76 organizations in 45 cities. At the time of publication, 29 organizations responded. Over a period of two months, 179 homeowners responded to the survey.

HAMP Mortgage Modification Survey 2010

There have been no major studies focusing on how quickly lenders and servicers move their delinquent borrowers through the foreclosure process and whether the speed of this process differs by race. NCRC’s survey provides a first glimpse of possible racial disparities in the speed of the foreclosure process.

HAMP Mortgage Modification Survey 2010 FINDINGS: Loan servicers foreclose upon delinquent Black or African ‐ American borrowers more quickly than delinquent White or Hispanic borrowers. –White borrowers found themselves in a foreclosure after being delinquent on their mortgages for 7 months or fewer. –African- Americans found themselves in the foreclosure process after only 4 months or fewer.

HAMP Mortgage Modification Survey 2010 Number of Months Past-due for Homeowners with Foreclosure Filing or Judgment by Race and Ethnicity RaceCountMinimum50 th Percentile75 th PercentileMaximum White Black Hispanic Other19999 Not Provided Total

HAMP Mortgage Modification Survey 2010 FINDINGS: White HAMP ‐ eligible borrowers are almost 50% more likely to receive a modification than African ‐ American HAMP ‐ eligible borrowers. –Only 24.3 percent of African ‐ American respondents and 32.3 percent of Hispanic or Latino respondents received some kind of modification. –In contrast, 36.4 percent of HAMP ‐ eligible whites received a modification.

HAMP Mortgage Modification Survey 2010 Loan Modifications by Race and Ethnicity of Respondent (HAMP Eligible) Modification: NoYesPendingMissingTotal Race count% % % % % White African American Hispanic Asian Other Race Not provided Total

HAMP Mortgage Modification Survey 2010 As a result of the findings from this survey, NCRC seeks to broaden both the scope of data collected and analyzed and increase the number of respondents. We are hoping to hear from over 100 housing counseling agencies and over 1000 borrowers.

The National Community Reinvestment Coalition The National Community Reinvestment Coalition (NCRC) is an association of more than 600 community-based organizations that promote access to basic banking services including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America's working families. Our members include community reinvestment organizations, community development corporations, local and state government agencies, faith-based institutions, community organizing and civil rights groups, minority and women- owned business associations, local and social service providers from across the nation

For more information: David Berenbaum, Chief Program Officer National Community Reinvestment Coalition th Street, Suite 900 Washington, DC P: (202) F: (202)