New Study Finds Neighborhood Mental Health Outcomes Are Connected To Mortgage Lending Levels

 

The University of Michigan and the National Community Reinvestment Coalition (NCRC) have published a study in the October 29, 2024 Journal of Urban Health (doi: 10.1007/s11524-024-00926-z. Epub ahead of print. PMID: 39470868) exploring the relationship between access to mortgage loans and improved neighborhood mental health. The research found that housing investment was linked to promoting community well-being. 

This 2024 study confirms several previous studies of the link between redlining and health. For example, the study "Mortgage Lending Bias and Breast Cancer Survival Among Older Women in the United States" published in the June, 2021 issue of the Journal of Clinical Oncology - 39(25):JCO.21.00112 - found that contemporary redlining has a negative impact on survival among older women with breast cancer. 

The 2021 study utilized a redlining index consisting of Home Mortgage Disclosure Act data (2007-2013) linked by census tract with a SEER-Medicare cohort of 27,516 women age 66-90 years with an initial diagnosis of stage I-IV breast cancer in 2007-2009 and follow-up through 2015. It found that 34% of non-Hispanic White, 57% of Hispanic, and 79% of non-Hispanic Black individuals lived in redlined tracts. As the redlining index increased, women experienced poorer survival rates. This effect was strongest for women with no co-morbid conditions, who were 54% of the sample. A similar pattern was found for breast cancer–specific mortality. The conclusion was that contemporary redlining is associated with poorer breast cancer survival. The impact of this bias is evidenced by the stronger effect even among women with health insurance (Medicare) and no co-morbid conditions. 

The 2024 study discovered that, in almost all of the 18 major U.S. metropolitan areas analyzed, neighborhoods with numerically more issued mortgages had better mental health outcomes. This probably is because of the firmer social stability and financial security that homeownership provides - which also helps reduce stress and anxiety. Increased mortgage activity often also is accompanied by such enhanced neighborhood improvements as better infrastructure, more green space, and community facilities. All of these strengthen social cohesion and improve well-being.

This 2024 study utilized the newly available HMDA longitudinal dataset which tracks mortgage lending data over decades. “This is a pioneering study in this field of research which leverages the mortgage lending data over decades, in order to assess patterns,” said Dr. Bruce Mitchell, NCRC Principal Researcher and a co-author of the new study “We hope that public health researchers can gather further insights into the relationships between community well-being and housing using this dataset.” 

Photo courtesy of Violette79 on Flickr.

Read the November 19, 2024 NCRC article.

Read the PubMed abstract of the 2024 study.

Read the ResearchGate abstract of the 2021 study.

New Study Finds Redlining Continues in 2024

A new study by the National Community Reinvestment Coalition (NCRC), entitled Decades of Disinvestment: Historic Redlining and Mortgage Lending Since 1981 (May 2024), has found that lenders "continue to reinforce patterns of structural racism in formerly redlined neighborhoods, regardless of local market dynamics. Fifty-five years after Congress outlawed using discriminatory maps to guide mortgage lending, race-based exclusion from homeownership is still a de facto reality."

To enable policymakers and analysts to definitively and precisely connect present-day conditions to past structural discrimination, the NCRC developed a new HMDA Longitudinal Dataset (HLD). It was created to utilize in this report and correct data deficiencies that have blocked our complete understanding of redlining for decades.

The NCRC urges because of these findings the need to implement and firmly enforce better-designed policy measures aimed at mitigating the impact of redlining and addressing residential segregation. Recent improvements to the Community Reinvestment Act (CRA), and the long-awaited Affirmatively Furthering Fair Housing (AFFH) rules - yet to be finalized by the US Department of Housing and Urban Development (HUD) - are important steps to combat the impact of redlining and lessen residential segregation in communities. However, they may not be sufficient, given the stickiness of redlining’s legacy over the half century since the Fair Housing Act (FHA) became law.

Read the May 2024 NCRC Report

Read about NCRC's new HMDA tool

The largest credit union rejected over 50% of its Black home mortgage applicants

A CNN analysis has found that Navy Federal Credit Union (Navy Federal) - the largest credit union - has the widest disparity in mortgage approval rates between White and Black borrowers of any major lender. In 2022, the disparity increased.

Navy Federal was founded in 1933 to serve Navy employees, but is now open to all members of the armed forces, Department of Defense personnel, veterans, and their relatives. With a membership around 13 million, it has over $165 billion in assets. Navy Federal lends to military servicemembers and veterans. 

Navy Federal approved more than 75% of the White borrowers who applied for a new conventional home purchase mortgage in 2022, according to the most recent data available from the Consumer Financial Protection Bureau. Less than 50% of Black borrowers who applied for the same type of loan were approved. In 2022, the credit union rejected about 3,700 Black applicants for home purchase mortgages. Navy Federal also approved Latino borrowers at significantly lower rates than White borrowers.

While many banks - in Baltimore and elsewhere - also approved White applicants at higher rates than Blacks, the almost 29% gap in Navy Federal’s approval rates was the widest of any of the 50 U.S. lenders that originated the most mortgage loans in 2022. The disparity was the same for White and Black applicants who had similar incomes and debt-to-income ratios. Navy Federal approved a slightly higher percentage of applications from White borrowers making below $62,000 a year than it did of Black borrowers making $140,000 or more.

CNN's statistical analysis also found that Black applicants to Navy Federal were over twice as likely to be denied as White applicants even when over 12 different variables – such as income, debt-to-income ratio, property value, downpayment percentage, and neighborhood characteristics – were the same.

Mortgage lending experts and fair housing advocates commented that the racial gaps in Navy Federal’s approval rates were very large and raised questions about the institution’s lending practices. Lisa Rice, the president and CEO of the advocate National Fair Housing Alliance said the racial gaps in Navy Federal’s lending identified by CNN were “some of the largest I’ve seen.”

It is important to note that CNN’s analysis doesn’t prove that Navy Federal discriminated against any borrowers. However, it does show significant disparities in the credit union’s approval rates for borrowers of different races – and that it has larger racial gaps than many other large financial institutions. The analysis was based on data collected under the Home Mortgage Disclosure Act.

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Read the December 14, 2023 CNN article.

 

HUD Charges New York Corporation and Associated Entities for Targeting Black Caribbean Homeowners in Fraudulent Mortgage Scam

HUD has charged multiple entities and individuals related to the Homeowner Assistance Services of New York (HASNY) with housing discrimination for perpetrating a scheme to deceive distressed homeowners into forfeiting title to their homes. HUD’s charge alleges that HASNY – plus six individuals, Springfield Realty of New York, Inc., Martin Development and Management, LLC, Launch Development, LLC, 272 Milford Street, LLC, Advill Capital, LLC, and Petermark II, LLC - targeted New York City homeowners in violation of the Fair Housing Act. Read the Charge. 

The Charge, filed on behalf of seven homeowners, alleges that HASNY and its associates targeted the homeowners for fraudulent mortgage and foreclosure prevention assistance by filing illegitimate liens and using telemarketing to convince homeowners to engage with HASNY for refinance assistance. After the homeowners accepted their offer of assistance, they used false promises of legal assistance, reassurances, and outright lies to convince the homeowners to sign documents that unknowingly sold their homes to Martin Development, LLC and Launch Development, LLC, which resulted for most forced them to vacate their homes. HASNY’s actions were disproportionately concentrated in neighborhoods which had a high majority of persons of color, especially Blacks and of Caribbean descent. They also used “affinity marketing” to gain the trust of elderly, vulnerable, and distressed homeowners by having telemarketers use their shared national origin and cultural practices to build trust with the homeowners. 

The U.S. Department of Justice previously criminally charged 3 of the men, as well as several other HASNY employees, with bank and wire fraud crimes from the conduct alleged in the Charge. Two respondents pleaded guilty and one was convicted after a jury trial and later disbarred. 

A U. S. Administrative Law Judge will hear HUD’s Charge unless any party elects to have the case heard in federal district court. If an administrative law judge finds, after a hearing, that discrimination has occurred, the judge may impose civil penalties and/or award damages to the homeowners for their losses as a result of the discrimination, injunctive relief, other equitable relief, as well as payment of attorney fees. In addition, the judge may impose civil penalties to vindicate the public interest. If a federal court hears the case, the judge may also award punitive damages to the homeowners. 

Read the June 13, 2023 HUD press