A new state study suggests that mortgage lenders are discriminating against minorities in Syracuse, putting up barriers to home ownership among people of color.
About 18.7% of the Syracuse metropolitan area’s population is non-white but lenders on average made 8.7% of their loans to borrowers who identify as people of color, according to a report released today by the state Department of Financial Services.
The state said its study examined Home Mortgage Disclosure Act data for Syracuse from 2016 to 2019.
The data revealed “a persistent lack of lending to people of color and in majority-minority neighborhoods,” the state said.
The Department of Financial Services said it found no violations of fair lending laws in the Syracuse area. But two lenders made an agreement with the state to improve their outreach to people of color and those who live in majority-minority neighborhoods.
Those lenders — 1st Priority Mortgage and Premium Mortgage Corp. — said they would reform their lending practices to give better access to underserved communities in Central and Western New York, state officials said.
Gov. Kathy Hochul, whose office released the report, promised to increase efforts to combat housing discrimination
“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,” Hochul said in a statement.
She said the state is developing new regulations to expand its oversight to non-bank mortgage lenders operating in the state. Those proposed regulations will be made public next year.
The state’s inquiry looked at lending practices in Syracuse, Rochester and Long Island, part of an ongoing statewide initiative.
In Syracuse, the Department of Financial Services said it found no violations of fair lending laws nor evidence of intentional discrimination. But the state concluded that 1st Priority Mortgage and Premium Mortgage Corporation had weaknesses in their fair lending and compliance programs.
As part of its agreement with the state, 1st Priority Mortgage must provide at least $150,000 in discounted or subsidized financing on loans for properties located in majority-minority neighborhoods. Those neighborhoods are where one or more racial, ethnic or religious minorities make up most of the population.
Premium Mortgage Corporation agreed to provide at least $500,000 in closing cost assistance or discounts and subsidies for borrowers in majority-minority neighborhoods.