By Dolores Kong
The Boston Globe

The racial disparity in home-mortgage lending worsened
in the Boston area between 1998 and 1999, with black
and Hi spanic applicants denied loans at 2 to 2.5
times the denial rate for whites, according to a study
released yesterday.

Of the 50 metropolitan areas studied, the Boston area
was one of five in which upper-income blacks were more
likely than low-income whites to be denied home
mortgages and in which upper- income Hispanics were
more likely than moderate-income whites to be denied

While the disparity grew in metropolitan Boston, it
declined nationally.

The study was based on data gathered under the federal
Home Mortgage Disclosure Act. It was released by the
Association of Community Organizations for Reform Now
(ACORN), a national grass- roots association that
seeks access to credit for low-income and minority
neighborhoods. The group has chapters around the
country, including Massachusetts.

"We keep hearing these big boom stories, [that] people
are doing much better," said Maude Hurd, national
president of ACORN and a Dorchester resident.

But this study shows "the gap is just widening more
and more," Hurd said. "It really troubles me."

In 1999, black applicants for conventional loans in
metropolitan Boston were denied 2.45 times more often
than whites, and Hi spanic applicants 1.84 times more
often, according to the study. In 1998, Boston-area
blacks had 2.26 times the denial rate of whites, and
Hispanics had a denial rate 1.82 times that of whites.

Nationally, blacks were denied at 1.96 times the rate
of whites in 1999, and Hispanics were denied at 1.41
times the rate of whites, an improvement over 1998. In
1998, blacks were turned down at 2.09 times the rate
of whites, and Hi spanics were denied at 1.51 times
the rate for whites.

Officials from the Massachusetts Bankers Assocation
and the state Division of Banks cautioned that the
federal data used in the ACORN study do not include
the credit histories and overall assets of applicants,
and those factors may explain some of the disparity in
the Boston area. The federal data consist of mortgages
for home purchases made by banks, mortgage companies,
and other lenders.

"One of the concerns I have about the study - I don't
know if I'd say it's a flaw - it's only focusing on
income levels," said Daniel Forte, president of the
bankers association, which represents about 210 of the
230 banks in Massachusetts, ranging from big
commercial banks to small community institutions.

Tanya Duncan, director of federal policy for the
bankers association, said, "You can have high income
and not have accumulated wealth."

Steven Antonakes, senior deputy commissioner for the
Massachusetts Division of Banks, said to get a truer
picture of denial rates, "you also need information
about credit history, property values, and other
things," which are not available through the federal
mortgage disclosure data.

But ACORN's Hurd said while differences in credit
history and overall wealth accumulation may explain
some of the racial disparity, "I don't think it would
make a great big deal of difference."

She pointed to the study's finding that Boston-area
blacks earning more than $78,600 were denied mortgages
more often than whites earning less than $32,750.
Twenty percent of high-income blacks were denied
conventional mortgages, while only 18 percent of low-
income whites were.

"It's certainly a statistic that's alarming and bears
review," agreed the state's Antonakes.

But Forte of the bankers association disagreed.
"Unfortunately, from a statistical standpoint,
African-Americans and other minorities have not had
the benefit of building up capital in general, as
whites have in general," he said. "They almost start
in a tougher position, and that's why you get some of
the higher denials."

He said the recent increase in real estate values in
the Boston area may have something to do with the
higher denial rates among minorities.

The ACORN study also found that in the Boston
metropolitan area, high- income blacks were denied
mortgages 3.44 times more often than high-income
whites, and high-income Hispanics 2.57 times more
often than high-income whites.

In August, the Federal Financial Institutions
Examination Council, which compiles mortgage numbers,
announced that the racial disparity in denial of
conventional mortgages had lessened or stayed the same
nationally, across all minority groups.

Between 1998 and 1999, denial rates for black
applicants dropped from 53.7 percent to 49 percent;
for Native Americans, from 52.9 percent to 42.1
percent; and for Hispanics, from 38.7 percent to 35
percent. For Asian American applicants, the denial
rates stayed the same, at 11.8 percent.

Nationally, white applicants also saw their denial
rates drop between 1998 and 1999, from 26 percent to
25.5 percent, according to the data.

While differences in income may have accounted for
some of the disparity, the agency noted that the
disparity occurred even if blacks, Native Americans,
and Hi spanics had the same income as white