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(Crain’s) — Residents of predominantly white neighborhoods here were more likely to get mortgage refinancing during the start of the housing bust than those in minority communities, according to a new report.
New refinancing loans in the Chicago area jumped 102% from 2008 to 2009 in predominantly white neighborhoods. During the same time per
iod, new loans declined 41% in mostly minority-occupied neighborhoods, according to a report released Thursday by a multistate coalition of advocacy groups, including Chicago-based Woodstock Institute.
In addition, nearly 40% of applications for refinancing loans were denied in local minority neighborhoods, while only 14% were denied in predominantly white areas, the report says.
“The implication of these numbers are pretty dramatic and raise a lot of concerns about the future,” says Geoff Smith, senior vice-president of the Woodstock Institute.
Of the 260,434 total Chicago-area applications received by lenders in 2009 for refinancing loans, 45,412, or 17.4%, were denied.
Nationally, applications for conventional refinancing jumped 76% in mostly white neighborhoods from 2008 to 2009. Over the same period, they sunk 36% in mostly minority neighborhoods, according to the report. The number of loans made nationally in white neighborhoods during that time rose 125% while sinking 17% in minority neighborhoods.
The report, “Paying More for the American Dream V: The Persistence and Evolution of the Dual Mortgage Market,” studied data from six other metropolitan areas: Boston; New York; Los Angeles; Cleveland; Rochester, N.Y., and Charlotte, N.C.
The local data cover a six-county region: Cook, DuPage, Lake, Kane, McHenry and Will.