Rachel Ford
GSNC/NHPBS
The State We’re In program
Click the link to watch the full interview on NH PBS's The State We're In.
This week, The State We’re In host Melanie Plenda discusses the data available surrounding loan practices, whether or not they are discriminatory, and what that means for residents and communities in New Hampshire. To discuss the details are three journalists who've been working on a series about housing and equity in New Hampshire: Jeff Feingold, editor of the New Hampshire Business Review; Granite State News Collaborative data and research editor Johnny Bassett; and reporter David Solomon.
This content has been edited for length and clarity. Watch the full interview on NH PBS's The State We’re In.
Melanie Plenda: David, can you tell us about the reporting on this story? Was it particularly challenging given the information available?
David Solomon: In order to determine the extent to which race played a role in approving mortgage applications in the state, we proceeded on two paths. One was to get the anecdotal evidence from the many researchers who looked into the topic nationally, from the Fair Housing Coalitions that exist in other states, and from the Fair Housing Coalition here in New Hampshire about information they've collected. Then we compared that with actual data from the Home Mortgage Disclosure Act, which requires lenders across the country to file data on the mortgages they issue, including ethnicity. By looking at the research that researchers had done, the information advocates had gathered, and the database that Johnny compiled showing the lending practices of the largest mortgage lenders in the state, we were able to at least draw a picture of the extent to which this problem exists in New Hampshire. There's no consensus about the source or reason for these denials, but it shows pretty conclusively that if you are a Hispanic loan applicant in New Hampshire, statistically, you have a far lower chance of being approved.
Melanie Plenda: Johnny, tell us about the data you collected and what you were able to learn from it.
Johnny Bassett. NH PBS/Franklin Pierce University.
Johnny Bassett: In order to get at this problem, we needed some descriptive statistics that would tell us who was getting loans in New Hampshire. To do that, we drew on a federal data set. The Home Mortgage Disclosure Act is what produced it, and it's from the Consumer Financial Protection Bureau. That data was just a starting point because it describes who is getting loans and it gives a little bit of information about who was rejected and why, but there would never be proof of discrimination. That's why Dave's reporting was so important, because we could use the table that he referenced to highlight which lenders did seem to have an abnormally high or low rate of approvals for different ethnicities, but in order to understand exactly what was going on, we needed to dig a lot deeper.
Melanie Plenda: Dave, what were you able to find out about why people were getting denied?
David Solomon. NH PBS/Franklin Pierce University.
David Solomon: The banks we spoke to did not contest the denial rates showing a much higher percentage of denial for Hispanics than white applicants. They obviously can't contest the mortgage data they provide to the federal government, but they do point out that there's a lot more to it that we don't see, which is the various factors that go into determining mortgage eligibility: such as income, the amount of the down payment, and the credit scores of the applicants. They all agreed that in most cases there's a certain pre-application process that ensures that someone completely unqualified doesn't even get into the pipeline. There's a lot of qualified applicants who find that one factor or another was the cause of the denial, not their race. No bank is going to admit that they have a policy of denying mortgages on the basis of ethnicity. Any statistics that suggest as much can simply be dismissed on the basis that you don't have all the numbers. We don't have all the numbers because although there have been many legislative efforts to include data like the applicant's income credit score and down payment size along with their ethnicity, the bankers have fought that arguing that they're protecting privacy whereas the advocates argue they're trying to shield disclosure of the information that could prove what's going on.
Melanie Plenda: How would you characterize the banking industry's responses to some of the questions that you asked about lending practices and disparities?
David Solomon: We reached out directly to the four banks that we highlighted in the story as having pretty significant differences in their approval rates. St. Mary's in Manchester for example, approved 52% of the loans submitted by Hispanic or Latino applicants compared to 80% of the loan applications submitted by whites or non-Hispanic. Most of the banks were very forthcoming, and they provided the breakdown of their denials and showed that ten were denied for insufficient collateral, ten were denied on credit score, four were denied on the income ratio, some were approved but withdrawn, and others were considered incomplete. These are legitimate reasons for these loans being denied. The banking commissioner says it might not be a coincidence and is probably something that should be looked into, but they don't have the personnel to do it.
Melanie Plenda: Jeff, what are some of the key takeaways with these articles that you hope stay with readers?
Jeff Feingold: A lot of people in New Hampshire don't think about this happening because they simply have a much smaller population of people who are a non-white, but it's a prevalent thing in many communities around the state and it's become much more of a hurdle. It's a barrier to people to get adequate housing, especially at a time when we have such a severe housing crisis in New Hampshire preventing people from getting housing. I'm certainly hoping the banks might look a little bit more closely at their practices and try to make those percentages a lot better. In the last couple of years, I think more corporations and institutions have become much more aware of the entire issue about race inequity, and I think this is a time where something like this can come to the forefront and something might be done about it at the institutional level.
Jeff Feingold. NH PBS/Franklin Pierce University.
Melanie Plenda: What's coming up next in this series?
Jeff Feingold: We have a story that's coming out in a week or so that links zoning and land use policies, and restrictive loaning and land use policies with homelessness and how there's a direct and an indirect effect of that. In terms of limiting the number of multifamily units that can be built, limiting the amount of housing available in communities results in people not having homes. We also have Johnny working on a piece on what kind of zoning policies would work, how positive zoning policies would work, and what those would look like when implemented.
These articles are being shared by partners in The Granite State News Collaborative as part of our race and equity project. For more information visit collaborativenh.org.