Housing Discrimination Eyed by Industry, Feds

Both the mortgage banking industry and U.S. Department of Housing and Urban Development (HUD) are making new efforts to attack various aspects of racial bias in housing. The Mortgage Bankers Association of America (MBAA) is sponsoring research designed to improve access to home loans for minorities and low-income people, while HUD recently announced it would identify discrimination in the selling and renting of houses and apartments.

"We need to be armed with the knowledge to deliver housing and mortgage credit to families and individuals who have been locked out of the American dream," Donald Lange, President of MBAA said in announcing the new Research Institute for Housing America. "It's not only good public policy, it's good business." Sponsored by MBAA, the new institute will work with academic experts, regulators, consumer and community groups, and the mortgage banking industry to pursue research and solutions on fair lending.

In a separate government effort, HUD will commission a 7.5 million-dollar study that will look at patterns of discrimination in the selling and renting of houses and apartments. "We have a lot of anecdotes and complaints but we do not have a good sense of the institutional discrimination that exists," said Housing Secretary Andrew Cuomo. Investigators from a wide range of racial and ethnic groups will pose as prospective buyers or renters in the HUD study. They will contact real estate brokers, landlords, and mortgage lenders, and report back on the reception they get. The survey will cover all regions of the country, including communities of varying populations in urban, suburban and rural areas. Cuomo cited recent statistics on home ownership as evidence that disparity is a serious problem. Home ownership is at 72.5 percent for whites compared with 45 percent for blacks and 44 percent for hispanics.

A national coalition of community groups recently released a study of its own showing that minorities were rejected for home mortgages at a higher rate than white applicants from 1995 through 1997, even as low interest rates and a healthy economy were increasing the number of first-time home buyers overall.