Whites received less than half the mortgages originated in the nation’s two most populous cities in 2015.
According to data in LendingPatterns™, whites received about 46 percent of mortgages in New York City, the nation’s largest, and 49 percent in runner up Los Angeles that year.
On the dollar side, whites received just 37 percent of mortgage finance in New York, while in LA dollars went to whites 48 percent of the time, nearly matching the percentage in numbers. (All numbers exclude purchased loans.)
In the Big Apple, the discrepancy in white share between percentage of mortgages and percentage of mortgage dollars may be explained by the fact that more than 40 percent of mortgage dollars were in the Unknown or NA categories. That took share away from whites and all main minority groups (Blacks, Hispanics, Asians) versus their share in number of mortgages.
Different minority groups were on top of the minority shares in the two cities. In New York it was Asians, who took 17 percent of mortgages, while in Los Angeles it was Hispanics, with 19 percent.
Minority totals for 2015 by number of mortgages were 33.8 percent in LA and 35.9 percent in New York, not far from the national total of 40.5 percent as of 2015, as estimated by the Census Bureau.
Los Angeles was a hotter mortgage city than NYC in 2015 despite having the smaller population. LendingPatterns™ data show LA with 69,000 mortgages to 56,000 for New York and $42 billion in finance compared to $40 billion.
Both cities had high percentage of jumbo mortgages and average loan amounts well above the Fannie Mae/Freddie Mac conforming limit. In the City of Angels, jumbos made up 44 percent and the average loan was $617,000 for a first lien. In New York, the corresponding numbers were 46 percent jumbo and an average first lien of $703,000.
The cities diverged on the purchase mortgage/refinancing split. In New York purchases dominated, at 60 percent to 36 percent refis. But in Los Angeles, refis made up 63 percent of business with just 32 percent in purchases.
Borrowers tilted towards upper income in both cities. Seventy percent of LA borrowers were in the highest income category, while in New York it was 62 percent. The low and moderate income categories combined had less than a 10 percent share in New York while in LA it was even lower, at less than seven percent.
Nearly a third of mortgages made in LA during 2015 stayed on lenders’ books. Of those sold into the secondary market, Fannie Mae had 23 percent while non-agency borrowers were at 20 percent. Freddie Mac was third with 18 percent.
In New York, mortgagors kept 43 percent of loans made in portfolio. Non-agency investors were the biggest buyers of loans, at a 25 percent share. Fannie Mae was the largest government agency in the market, at 18 percent.
(Mark Fogarty is a journalist and analyst who has been covering the mortgage industry for more than 30 years.)