Department of Financial Services Secures Agreements with Two Mortgage Lenders to Improve Service to Their Whole Communities
Part of Ongoing Statewide Effort to Combat Housing Discrimination
Governor Kathy Hochul today announced a new report from the Department of Financial Services that illuminates continued racial disparities in mortgage lending practices on Long Island, in Rochester and in Syracuse as part of an ongoing statewide inquiry into redlining. The announcement follows a previously published Department of Financial Services report that identified redlining and other forms of housing discrimination by mortgage lenders, particularly non-depository lenders, in majority-minority neighborhoods in Buffalo.
"This report sheds a light on the barriers that communities of color, who have historically faced discrimination when seeking a mortgage, continue to face when it comes to making the dream of homeownership a reality," Governor Hochul said. "With our state in the midst of a housing crisis, practices like redlining not only restrict New Yorkers' access to homeownership, but also threaten affordability statewide. My administration remains committed to combatting housing discrimination in New York State and exploring solutions, like the expansion of the Community Reinvestment Act, to ensure that the path to homeownership is available to all."
Department of Financial Services Superintendent Adrienne A. Harris said, "Communities of color continue to face discrimination and barriers in achieving the dream of homeownership. I am committed to ensuring that all lenders serve their entire community, because equal access to affordable credit is a key not just to homeownership, but to developing generational wealth and truly addressing inequality."
The Department of Financial Services previously issued a report identifying redlining in the Buffalo metropolitan area and the outcome of a related enforcement action. The Department of Financial Services' inquiry into mortgage lending in the Syracuse and Rochester metropolitan areas and in Nassau and Suffolk counties again revealed a persistent lack of lending to people of color and in majority-minority neighborhoods.
The Department of Financial Services analyzed Home Mortgage Disclosure Act data and found:
- In Nassau county, where the population is 41.8 percent non-white, on average, lenders make 35.32 percent of their loans to borrowers identifying as people of color. Among lenders operating in the county, lending to borrowers identifying as people of color ranges from 14.9 percent to 50.22 percent.
- In Suffolk county, where the population is 33.7 percent non-white, on average, lenders make 22.44 percent of their loans to borrowers identifying as people of color. Among lenders operating in the county, lending to borrowers identifying as people of color ranges from 13.07 percent to 36.85 percent.
- In the Rochester metro area, where 23.9 percent of the population is non-white, on average lenders make 11.32 percent of their loans to borrowers identifying as people of color, less than half of what would be expected based solely on population make-up.
- Similarly, in the Syracuse metro area, 18.7 percent of the population is non-white, but on average lenders make 8.67 percent of their loans to borrowers identifying as people of color.
The report contains details of individual institutions' performance in lending in majority-minority neighborhoods and to borrowers identifying as members of a minority group, as well as maps of lending activity in the cities.
Although the Department of Financial Services inquiry did not find fair lending law violations, two mortgage lenders,1st Priority Mortgage, Inc. and Premium Mortgage Corporation have agreed to reform lending practices and implement programs to ensure better access to historically underserved communities in Western and Central New York. These mortgage lenders originate hundreds of mortgages annually in Rochester, Syracuse, and Buffalo. The Department of Financial Services investigations into other lenders in Buffalo, Rochester, Syracuse and Long Island are ongoing.
The Department is currently developing regulations to implement the updated New York Community Reinvestment Act which expands oversight to non-depository mortgage lenders operating in the state. The insights uncovered through these redlining studies and investigations will be reflected in these proposed regulations which will be published for public comment in 2023.
Today's announcements are part of an ongoing statewide effort to combat housing discrimination. In August, Governor Hochul and Attorney General Letitia James announced settlements with three real estate brokerages totaling more than $115,000, in addition to requiring fair housing trainings, for discriminating against homebuyers of color. And in December 2021, Governor Hochul signed a sweeping legislative package of nine bills to address many issues identified in an investigative report by Newsday, which explored discrimination and both explicit and implicit bias that exists in the real estate industry. The bills included the Anti-Discrimination in Housing Fund that permits the state to conduct fair housing testing. The bills also increased training and maximum fines for misconduct by real estate brokers and salespersons.
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