State Report Finds Racial Disparity In Long Island Mortgage Lending

LONG ISLAND, NY — Racial disparities persist in mortgage lending practices on Long Island, according to a report released Thursday by the state's Department of Financial Services.

Minority homebuyers are approved for mortgages at a lower rate than white homebuyers across Long Island, the report said, and the same discrepancies persist in Rochester and Syracuse. The report was released as part of a statewide inquiry into modern-day redlining.

"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," Gov. Kathy 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."

Redlining was the practice of outlining areas on maps (usually with red ink) where realtors would — and would not — sell homes to people of color. The practice has been outlawed for decades, but racial disparities still exist in housing.

With modern-day redlining, lenders refuse mortgages for homes in certain neighborhoods, refuse to do business in minority neighborhoods and impose stricter terms on loans to homes in particular neighborhoods.

The report found that Long Island mortgage lenders appear to discriminate against non-white applicants. In Nassau County, where the population is 41.8 percent non-white, lenders make 34.27 percent of their loans to borrowers identifying as people of color, on average.

In Suffolk, where the population is 33.7 percent non-white, lenders make 21.86 percent of their loans to borrowers identifying as people of color, on average.

The financial Services department is still investigating other lenders in the area. It is also working to develop rules which would expand oversight into non-depository mortgage lenders in New York. The proposed regulations will open to public comment next year.

"Communities of color continue to face discrimination and barriers in achieving the dream of homeownership," said Adrienne Harris, superintendent of the DFS. "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."

You can read the full report here.