Progress 10/01/07 to 09/30/11
Outputs
OUTPUTS: The PIs completed the proposed three objectives of the study: (1) creating a database of NC home loan lending patterns from the FFIEC's HMDA (Federal Financial Institution's Examination Council's Home Mortgage Disclosure Act) database for the period of 2006, (2) producing a descriptive profile of the lending patterns of selected MSAs (Metropolitan Statistical Areas), and (3) conducting comparative analyses of home lending patterns between urban and rural areas. To implement the research objectives (1), the PIs contacted the FFIEC to request the 2006 HMDA data and then developed a dataset having a subsample showing only loans that originated in NC (N = 393,361). Descriptive statistics were employed to produce a descriptive profile of NC home loan lending patterns. To implement the research objectives (2) and (3), the PIs developed a subsample (N = 62,500) including eight MSAs (four urban/four rural). Descriptive statistics were employed to produce a descriptive profile of the lending patterns of selected MSAs; and Chi-square analyses were conducted to examine differences between NC urban and rural home lending patterns. Additionally, multiple regression analyses were employed to further investigate overall relationships between loan amount and demographic and lending variables. The 2007-2011 project results and further 'housing' research activities have led to three journal articles, eight abstract papers, and ten oral presentations in conferences. The journals includes Housing and Society, Cityscape, and HUD website; the oral presentations were conducted in the NCAFCS (North Carolina Association of Family and Consumer Sciences) Annual Conference, ARD Biennial Research Symposium, AAFCS (American Association of Family & Consumer Sciences) Annual Conference, HERA (Housing Education and Research Association) Annual Conference, EFERMA (Eastern Family Economics and Resource Management Association) Conference, and Annual American Real Estate Society Meeting. Abstract papers were provided each conference proceedings. PARTICIPANTS: Principal investigators, a research associate, and a graduate assistant had involved in this project. The PIs were in charge of project coordination, technical assistance, research design, overall supervision, reporting and management, and writing reports and publications. The research associate and graduate assistant had assisted the PIs with literature development, statistics, and conference preparation. Regarding collaborations, the PIs worked with the FFIEC (Federal Financial Institutions Examination Council) to clarify variables of the secondary dataset; and HUD (Department of Housing and Urban Development) to obtain lending information. TARGET AUDIENCES: Target audiences were housing consumers (homeowners/prospects) in North Carolina, community leaders, policymakers, academic professionals, and finance industry. PROJECT MODIFICATIONS: Not relevant to this project.
Impacts
In North Carolina, 94% of all loans were defined as conventional loans and 58% and 37% were used for home purchases and refinancing respectively. Only 4% and 16% were borrowed by manufactured housing and not owner-occupied residents respectively; 4% were loans where preapproval was requested; 13% of loan applicants were African American, compared with 73% Whites. 64% of borrowers were male, 42% were rural residents, 27% were those living in high minority areas and 35% were low-income borrowers. Loan amounts ranged from $1,000 to $91,224,000 and applicant incomes ranged from $1,000 to $9,999,000. In the selected MSA rural areas, 6% of loans were made by manufactured housing residents. Chi-square analyses revealed statistically significant associations between urbanicity and demographic and lending variables. In rural areas, applicants were more likely to live in manufactured housing, to have loans for home improvement and to have low-income levels compared to those in urban areas. Regression analyses determined significant associations between loan amount and demographic and lending variables. Applicants in rural areas received smaller loan amounts than those in urban areas; Asians were more likely to receive larger loan amounts than Whites; those having conventional loans received smaller loans than those having FSA/RHS; those having loans for home purchases received larger loan amounts than those receiving loans for refinancing; those having loans for home improvement received smaller loans than loans received for refinancing; those having higher incomes were likely to receive larger loan amounts; those living in high minority areas received smaller loan amounts than those in low minority areas; Hispanic or Latinos had smaller loan amounts than non Hispanic or Latinos; those living in manufactured housing received smaller loans than those living in multifamily housing. Overall, the project results revealed housing affordability issues in North Carolina, implying lending disparities based on location, income level, ethnicity, race, and housing type. In North Carolina, the subprime foreclosure rates had increased three fold from less than 17,000 in 1998 to 50,000 in 2007; and the proportion of 2006 home loans to African American families that were subprime was 43% (Center for Responsible Lending, 2008). Therefore, an important value of the project is analysis and documentation of the lending profiles of NC residents, focusing on lending patterns and demographic characteristics. The project results will make current homeowners and/or prospects more aware of their lending environments and conditions as well as increase their knowledge of lending practices; community leaders can effectively educate consumers regarding predatory lending programs and the homeownership process; policy makers can consider more appropriate government supported lending programs for low-income minorities; and the finance industry will be more aware of the lending environment in NC.
Publications
- Lee, S., Parrott, K. R., & Mitchell, K. J. (In review). A profile of female renters in the United States: The 2009 American Housing Survey.
- Lee, S., Miran, B., & Parrott, K. P. (In review). Housing challenges of African American homeowners in the past decade: Data from the American Housing Survey, 2001 - 2009.
- Lee, S., Parrott, K., & Ahn, M. 2011. Exploring housing conditions of low-income minorities in the Southern United States. Selected paper prepared for the American Housing Survey User Conference. Retrieved from HUD User website: http://www.huduser.org/portal/about/ahs_conference_030811.html
- Lee, S., Giddings, V. L., & Robinson, S. R. 2011. Exploring 2006 and 2009 lending patterns in rural North Carolina. Proceedings of the 2011 Annual Conference of the Housing Education and Research Association, 149-154.
- Parrott, K., Lee, S., & Ahn, M. 2011. A demographic profile of low-income Southern minorities: The 2009 American Housing Survey. Proceedings of the 2011 Annual Conference of the Housing Education and Research Association, 162-168.
- Lee, S., Giddings, V. L., & Robinson, S. R. 2011. Exploring lending patterns in rural North Carolina. Proceedings of the 2011 ARD Biennial Research Symposium, 2011, 205.
- Lee, S., Giddings, V. L., & Robinson, S. R. 2011. Assessing lending patterns in North Carolina [Abstract]. Retrieved from NCAFCS (North Carolina Association of Family & Consumer Sciences) Website: http://www.ncafcs.org/page9.html
- Lee, S., Parrott, K., & Ahn, M. 2012. Exploring housing challenges of low-income minorities in the Southern United States. Cityscape. 14(1). Accepted
- Lee, S., Gunden, C., & Thomas, T. 2012. Housing affordability issues in the Southern United States. Proceedings of 2012 EFERMA (Eastern Family Economics and Resource Management Association) Conference. Accepted
|
Progress 01/01/10 to 12/31/10
Outputs
OUTPUTS: The objectives of the study were (a) to create a database of NC home loan lending patterns from the FFIEC's HMDA database for the period of 2006, (b) to produce a descriptive profile of the lending patterns of selected MSA Areas, and (c) to conduct comparative analyses of home lending patterns between urban and rural areas. To accomplish the objectives, relevant literature was collected to support the purpose. The data analyses involved the development of two subsamples: (a) a subsample showing only loans that originated in NC (N = 393,361) to produce a descriptive profile of NC home loan lending patterns and (b) a subsample including eight MSAs (four urban/four rural) to examine differences between NC urban and rural home lending patterns (N = 62,500). Several statistical methods were employed. A subprime variable proposed in 2007 by the previous PI could not be used because the last subprime lending list was compiled in 2005 by HUD and there was no updated list for 2006. Descriptive statistics revealed that 94% of all loan areas were defined as conventional loans and 58% and 37% were used for home purchases and refinancing respectively. Only 4% and 16% were borrowed by manufactured housing and non-owner-occupied residents respectively; 4% were loans where preapproval was requested; 13% of loan applicants were African American, compared with 73% Whites. 64% of borrowers were male, 42% were rural residents, 27% were those living in high minority areas and 35% were low-income borrowers. Loan amounts ranged from $1,000 to $91,224,000 and applicant incomes ranged from $1,000 to $9,999,000. In the selected MSA rural areas, 6% of loans were made by manufactured housing residents. Chi-square analyses revealed statistically significant associations between urbanicity and demographic and lending variables. In rural areas, applicants were more likely to live in manufactured housing, to have loans for home improvement and to have low-income levels compared to those in urban areas. Regression analyses determined significant associations between loan amount and demographic and lending variables. Applicants in rural areas received smaller loan amounts than those in urban areas; Asians were more likely to receive larger loan amounts than whites; those having conventional loans received smaller loans than those having FSA/RHS; those having loans for home purchases received larger loan amounts than those receiving loans for refinancing; those having loans for home improvement received smaller loans than loans received for refinancing; those having higher incomes were likely to receive larger loan amounts; those living in high minority areas received smaller loan amounts than those in low minority areas; Hispanic or Latinos had smaller loan amounts than non Hispanic or Latinos; those living in manufactured housing received smaller loans than those living in multifamily housing. The PI has concurrently analyzed the 2009 HMDA data to compare 2006 and 2009 information and has developed conference presentations. Future tasks will involve completing a final report, participating in presentations and preparing manuscripts for publication in research journals. PARTICIPANTS: The PI has contacted with FFIEC (Federal Financial Institutions Examination Council) to clarify variables of the secondary dataset, HMDA LAR (Home Mortgage Disclosure Act Loan Application Register); and the HUD (Department of Housing and Urban Development) to obtain lending information. A research associate and a graduate assistant have assisted the PI with literature development, statistics, and conference paper preparation. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
In the U.S., the homeownership rate of minorities in 2009 was low (49.7%) in comparison to Whites (74.8%). Similarly, the median income in 2008 for 35 to 44 year old minority-headed households was only $45,000, while that for Whites was $72,900 (The Joint Center for Housing Studies of Harvard University, 2010). Awareness of demographic data and housing trends which reveal such inequities is of importance, particularly in the southern U.S., because increasingly, low-income minorities in this region are likely to struggle financially in their efforts to obtain affordable housing, especially in a depressed economy. In North Carolina, the subprime foreclosure rates have increased three-fold in recent years from less than 17,000 in 1998 to 50,000 in 2007; and the proportion of 2006 home loans to African American families that were subprime was 43% (Center for Responsible Lending, 2008). Therefore, an important value in the current study is the analysis and documentation of the lending profiles of NC residents, focusing on lending patterns and demographic characteristics. Data analyses with HMDA datasets can assist housing researchers, educators, nonprofit organizations, or policymakers in their research and policy development in an effort to obtain equity in lending patterns and homeownership.
Publications
- S. Lee, V. L. Giddings, & S. R. Robinson. 2011. (In review). Exploring housing affordability issues of U.S. Southern minorities.
- S. Lee, V. L. Giddings, & S. R. Robinson. 2011. Exploring lending patterns in rural North Carolina. Paper submitted for presentation at the 2011 ARD Biennial Research Symposium, Atlanta, GA.
|