A new report by the Center for Investigative Journalism (CIJ) found that Latinos in Iowa City were four times more likely to be rejected for a home loan than non-Hispanic whites. In order to identify metro areas with significant racial disparities in home lending, CIJ analyzed documents on 31 million conventional home loan applications that financial institutions are required to file with the federal government under the Home Mortgage Disclosure Act (HMDA). Iowa City had the largest disparity in the rejection rates between Latino and white applicants in the nation.
The Iowa City home loan market is dominated by two institutions: University of Iowa Community Credit Union (UICCU) and Hills Bank and Trust. Hills’ rejection rate for Latino home loan applicants was responsible for Iowa City’s ranking. During the two periods CIJ examined, 2015-16, Hills received 41 percent of Iowa City-area conventional home loan applications filed by Latinos and accounted for 68 percent of their rejections, according to HMDA data.
Hills rejected 16.5 percent of home loan applications from Latinos (or 15 of 91 unique applications), and 2.4 percent of those from whites. UICCU did not report rejecting any applications from Latino during the same time period.
Hills CEO Dwight Seegmiller told the Associated Press’ Ryan Foley the bank “is committed to treating all home loan applicants fairly and equitably,” and said internal records showed it only rejected 10 of 83 applications from Latino applicants, during the two years CIJ examined. Seegmiller claimed the higher numbers CIJ found were the result of the bank accidentally filing HMDA information on some loans twice.
Seegmiller repeated the claim about double filing HMDA in a post on Hills official blog.
CIJ researchers did not report finding any duplicate filings. And as the AP notes, even using Hills lower numbers, Latinos made up 3 percent of Hills’ Iowa City-area home loan applicants, but 10 percent of the applicants who were rejected.
This is not the first time a report has found racial disparities in the Iowa City home loan market. A 2014 study of the fair housing issues in Iowa City published by the University of Iowa Public Policy Center concluded,
Minorities in the Iowa City area may not have fair access to residential lending. Analysis of HMDA data showed that the share of home loan applications from minorities are much lower than their share in the population, and that applications from Blacks and Hispanics were being denied at higher rates than applications from White applicants.
According to the CIJ report, Hills did not reject any applications by black applicants during 2015 and 2016.
Are there not any more statistics? What about differences in income? Creditworthiness? Employment history? Debt to income ratios? The dollar amount of the loans applied for? Without presenting those facts, you’ve completely ignored the relevant criteria and made this a race issue. This story and report are laughable… where are the facts at? If Latino applicants had a higher debt to income ratio or lower credit scores, that would account for the differences. But there was no mention of that because that would ruin the false narrative of the article.