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BANK OF AMERICA HMDA DATA SHOWS INCREASE IN MINORITY AND LOW-INCOME LOANS

 SAN FRANCISCO, Aug. 18 /PRNewswire/ -- Bank of America (NYSE: BAC) increased its home loans to minority and low-income customers in California by approximately 50 percent during 1992 compared to the previous year, according to federal Home Mortgage Disclosure Act data.
 "Bank of America has significantly increased its lending to these targeted communities," said Chairman and Chief Executive Officer Richard M. Rosenberg. "This was due in part to extraordinary conditions in the housing market, including stable home prices and the lowest interest rates in 30 years. But it is also the result of initiatives Bank of America is taking to reach out to low-income and minority markets with new programs that are more responsive to their needs."
 Bank of America has a goal of providing $12 billion in community reinvestment loans over 10 years in the western U.S. In 1992, the bank made $2.1 billion in community reinvestment loans in California.
 According to data submitted by the bank to the Federal Reserve Board under the Home Mortgage Disclosure Act (HMDA), the number of home purchase, refinance and home improvement loans to African Americans in 1992 increased by 57.4 percent to 2,927; to Hispanic customers by 49 percent to 8,514; to Asian/Pacific Islanders by 16.5 percent, to 6,694; and to white customers by 21 percent to 61,446.
 The number of home loans to low-income customers -- those earning less than 80 percent of the median income of the metropolitan statistical area where they reside -- rose 63.9 percent to 12,399. The HMDA data was based on a total of 158,000 loan applications in 1992.
 Under the Home Mortgage Disclosure Act, banks are required to analyze their home loans by race, income and gender and make the data public. Bank of America has analyzed its lending performance in major California Metropolitan Statistical Areas, and will be making those localized lending reports available to local officials and community leaders.
 "Our goal is to generate more applications in minority and low- income communities," said Executive Vice President Donald A. Mullane of Corporate Community Development. "Our program is working. In just two years, we have doubled the number of loans made to African American and Hispanic customers, and increased loans to low-income customers by 228 percent. But we realize there is more to do and we will continue our efforts as we go forward."
 Differences in loan denial rates among racial and income groups continued to exist in 1992, Mullane said. According to the bank's HMDA data, 22.9 percent of loan applications from white customers were declined, compared to 29.5 percent of Asian/Pacific Islander applications, 37.4 percent of African American applications, 38.8 percent of Hispanic applications, and 36.5 percent of American Indian applications.
 The average decline ratio -- the rate at which minority applicants were declined compared to white applicants -- was 1.54-to-1 in 1992, compared to 1.45-to-1 in 1991 and 1.5-to-1 in 1990. That compares to an average decline ratio among all U.S. financial institutions of 2.4-to-1, according to 1991 HMDA data.
 BofA's 1992 HMDA data showed that applicants with higher incomes were more likely to be approved. Approval rates ranged from an average of 52.8 percent for applicants making less than 80 percent of median income to 67.2 percent for those earning more than 120 percent of median income.
 According to the 1992 HMDA data, the two leading reasons for declined loan applications from African American and Hispanic customers were credit history and insufficient debt-to-income ratios. Among white applicants, the leading decline reasons were insufficient debt-to-income ratios and valuation problems with the collateral property.
 Mullane attributed the slight rise in the decline ratio, in part, to the bank's increased marketing, advertising and outreach in minority and lower-income communities. These actions significantly increased the volume of applications, including marginal applications, which caused decline rates to increase. The decline ratio may have also been affected by Bank of America's merger with Security Pacific in April 1992, Mullane said. According to 1991 HMDA data, the decline ratio at Security Pacific was approximately 2-to-1.
 "The decline ratios continue to concern us," Mullane said. "We intend to further explore opportunities to be more responsive to the special needs of lower-income and minority communities."
 To further ensure that all its subsidiaries provide full and equal access to credit, BankAmerica Corporation in 1992 adopted a Fair Lending Statement, which states that the corporation "is fully committed to the principle that all credit decisions should be made without regard to race, color, national origin, religion, sex, age, marital status, sexual orientation, disability, or any other basis prohibited by law. We will fullfill this commitment while maintaining prudent credit discipline and achieving an acceptable return for our shareholders."
 As part of a comprehensive fair lending program, Bank of America is conducting training sessions at branches and loan centers to reinforce the bank's commitment to fair and equal treatment of all customers.
 A significant portion of Bank of America's home loans in 1992 was generated under the Neighborhood Advantage program, which was introduced in 1990 and uses modified underwriting criteria to expand eligibility. Under Neighborhood Advantage, potential borrowers may make a down payment as low as 5 percent on loans of up to $203,150. Borrowers who make a down payment of 10 percent or more may be able to qualify for a home loan with up to 30 percent less income than would normally be required.
 In addition, Neighborhood Advantage allows borrowers to establish their credit history without previous loans or credit cards if they can demonstrate a history of meeting other financial obligations in a timely manner.
 -0- 08/18/93
 /CONTACT: Russ Yarrow of Bank of America, 415-953-1411/
 (BAC)


CO: Bank of America ST: California IN: FIN SU:

PK-SG -- SF006 -- 3888 08/18/93 11:49 EDT
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Date:Aug 18, 1993
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