The report, Paying More for the American Dream V: The Persistence and Evolution of the Dual Mortgage Market, examines changes in conventional refinance lending between 2008 and 2009 in seven metropolitan areas: Boston, Charlotte, Chicago, Cleveland, Los Angeles, New York City and Rochester, NY. It also compares 2009 loan denial rates across neighborhoods. In all seven cities analyzed, lenders denied loan applications at significantly higher rates in communities of color than in predominantly white neighborhoods.

“Refinance loans are critical to stabilizing communities hardest hit by the foreclosure crisis,” said Sarah Ludwig, Co-Director of the Neighborhood Economic Development Advocacy Project (NEDAP) in New York. “Homeowners need access to sound loan modifications and refinance loans to lower their monthly mortgage payments and save their homes.”

“These findings build on our past reports, which have documented ongoing racial disparities in mortgage lending,” said Adam Rust, Director of Research at the Community Reinvestment Association of North Carolina.  “Lenders are loosening up credit in predominantly white neighborhoods, while continuing to deprive communities of color of vital refinancing needed to aid in their economic recovery.”


Learn more about the report during a briefing on Friday, April 29 at 1pm


Key findings in the report include:

From 2008 to 2009 in the seven cities examined, applications for conventional refinance loans increased 76 percent in predominantly white neighborhoods, while the number of loans made in these neighborhoods increased 125 percent.

Over this same period in communities of color, conventional refinance applications declined by 36 percent and originations declined by 17 percent.

For example, in Chicago, conventional refinance originations in predominantly white neighborhoods increased by 102 percent from 2008 to 2009, but over the same period declined by 41 percent in communities of color.

In the seven cities, lenders were more than twice as likely to deny conventional refinance loans to homeowners in communities of color as they were to homeowners in majority white neighborhoods in 2009.

Denial rates in communities of color ranged from 28.9 percent in Los Angeles to 60 percent in Cleveland, whereas in predominantly white communities, denial rates ranged from a low of 11.7 percent in Boston to a high of 24.4 percent in New York.


The multistate coalition details a series of policy recommendations in the report.


The groups specifically call on regulatory and enforcement agencies to:

Ensure access to affordable mortgage credit – including 30-year fixed-rate mortgages – as new regulations and housing finance reforms are implemented;

Reach a strong State Attorneys General settlement with mortgage servicers, to curb fraudulent foreclosure practices and hold servicers accountable.

Require public disclosure of detailed mortgage lending and loan modification data, to create transparency around bank lending and foreclosure practices.

Expand the Community Reinvestment Act (CRA) to promote responsible lending and investment.

Prioritize fair lending enforcement to root out discriminatory practices and policies.



The Paying More for the American Dream series is a collaborative report prepared by the California Reinvestment Coalition, Community Reinvestment Association of North Carolina, Empire Justice Center, Massachusetts Affordable Housing Alliance, Neighborhood Economic Development Advocacy Project, Ohio Fair Lending Coalition, and Woodstock Institute. This is the collaboration’s fifth annual report examining systemic inequalities in the housing finance system and their impact on lower-income neighborhoods and communities of color. Since the release of the first report in 2007, the series has chronicled the trajectory of the mortgage lending and foreclosure crisis and its effects on communities of color.

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For more information or to arrange interviews, please contact one of the following collaborative organizations:

Charles Bromley, Ohio Fair Lending Coalition (216) 410-3879

Tom Callahan, Massachusetts Affordable Housing Alliance (617) 822-9100

Alexis Iwanisziw, NEDAP (212) 680-5100

Kevin Stein, California Reinvestment Coalition (415) 864-3980

Adam Rust, Community Reinvestment Association of North Carolina (919) 667-1557 x31

Geoff Smith, Woodstock Institute (312) 368-0310 x2027

Barbara van Kerkhove, Empire Justice Center (585) 295-5815