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MINORITY MORTGAGE INITIATIVES ACHIEVE SUBSTANTIAL RESULTS

 NEW YORK, Aug. 18 /PRNewswire/ -- Chemical Bank said today that the aggressive programs it had initiated to sharply expand mortgage lending to minorities in New York State resulted in significant volume gains during the first six months of 1993 and the bank expects to close on more than $300 million in mortgages to minority borrowers for full-year 1993, up from $199 million in 1992.
 Chemical said that its sharply focused initiatives also led to a significant rise in mortgage loan approval rates for African American and Hispanic applicants and a narrowing of the gap between denial rates for white applicants and those for minority applicants.
 The bank said that it was particularly encouraged by the sharp rise in mortgage applications from minorities, which it said was the direct result of extensive community outreach programs, including more than 200 evening and half-day instructional seminars for prospective first-time home owners and an ongoing advertising campaign in newspapers and on radio stations targeted to African American and Hispanic audiences. The advertisements, which were developed by a minority owned ad agency, run in both English and Spanish and carry the headline: "Why pay rent when you can buy your own home?"
 Chemical credited the rise in minority approval rates to its new five-step credit review process, which was recently featured in a front- page story in the American Banker. The newspaper reported that "few lenders have internal reviews as extensive as Chemical's" and noted that "Chemical's internal review policy demonstrates the lengths some banks have gone to make sure they are treating minority applicants fairly."
 Chemical said that because of its new review procedures and more flexible mortgage products, roughly 40 percent of the minority applications that would have been declined using conventional underwriting standards were ultimately approved, in part by a special committee of senior bank officers who have the authority to adjust policy to accommodate exceptions to traditional credit criteria.
 The bank said that despite its more flexible approach, virtually all of the mortgages in its Affirmative Mortgage portfolio -- loans that do not qualify for sale in the secondary market -- are current and none are in foreclosure.
 "We are clearly proving that with the right programs and the marshaling of dedicated resources, lending opportunities to lower-income and minority borrowers can be increased without taking on imprudent risks," said Carol Parry, managing director and head of Chemical Bank's Community Development Group.
 "We found that the challenges were more complex than they appeared at first blush, but as we began to examine all of the variables involved, we realized that special situations could be accommodated through well designed and very targeted initiatives," Ms. Parry said.
 Ms. Parry said that some of Chemical's new programs had already exceeded their original targets. For example, she noted that the bank's Affordable Mortgage Unit had set an initial 1993 target of $75 million.
 "By the end of May, we had already reached that level and we have set a new goal of $150 million, which we most likely will exceed," Ms. Parry said. "Significantly, the majority of these loans will be made to first-time home buyers."
 Highlights for the first six months of 1993 included:
 -- Total mortgages to minority borrowers of $148.8 million, versus $199.6 million for full-year 1992.
 -- As a percentage of total home-purchase mortgages made in the first six months, 25.0 percent were to minority borrowers, many of them first-time home buyers, up from 17.3 percent of total home purchase loans in 1992.
 -- The mortgage denial rate for African American applicants in the first six months of 1993 fell to 28.9 percent, down from 50.0 percent in 1992. During the same six-month 1993 period, the denial rate for white applicants was 18.1 percent, versus 27.7 percent in 1992. This means that the difference between the African American denial rate and the white denial rate has been cut in half, narrowing the gap from 22.3 percentage points in 1992 to 10.8 percentage points in year-to-date 1993.
 -- The mortgage denial rate for Hispanic applicants in the first six months of 1993 fell to 28.6 percent, down from 48.1 percent in 1992. This means that the difference between the Hispanic denial rate and the white denial rate narrowed from 20.4 percentage points in 1992 to 10.5 percentage points in year-to-date 1993.
 A summary of Chemical's 1991, 1992 and 1993 year-to-date Home Mortgage Disclosure Act report is attached.
 SUMMARY OF CHEMICAL BANK'S HOME MORTGAGE DISCLOSURE ACT REPORTS
 (New York Markets)
 Home Purchases and Refinancings
 1991(A) 1992 January-June
 1993
 Total Mortgage Originations
 ($ millions) $672.9 $1,593.0 $923.8
 Total number of mortgages 4,485 10,437 6,053
 Mortgages to minorities
 ($ millions) 79.9 199.6 148.8
 Mortgages to minorities
 as a percentage of total dollars 11.9 pct. 12.5 pct. 16.1 pct.
 Number of mortgages to minorities 622 1,522 1,143
 Mortgages to minorities as a
 percentage of total mortgages
 originated 13.9 pct. 14.6 pct. 18.9 pct.
 Declination Rates
 (Amounts in percent)
 1991(A) 1992 January-June
 1993
 Asian 51.5 39.1 19.6
 African American 57.9 50.0 28.9
 Hispanic 59.7 48.1 28.6
 Total Minority 55.6 45.5 26.8
 Total White 36.5 27.7 18.1
 (A) Combined mortgage data of Chemical Bank and Manufacturers Hanover Trust
Company. -0- 8/18/93
 /CONTACT: John Stefans of Chemical Banking Corporation, 212-270-7438/
 (CHL)


CO: Chemical Banking Corporation ST: New York IN: FIN SU:

LG-OS -- NY024 -- 3884 08/18/93 11:37 EDT
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Date:Aug 18, 1993
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