UMass Donahue Institute

The report found that a total of 3,900 Black households and 7,155 Hispanic/Latinx households obtained home purchase loans in 2020 (both record highs). Total mortgage
loan volume also peaked with 76,380 home-purchase mortgages in Massachusetts in 2020.

Black residents comprise 6.5 percent of the statewide population yet only received 3.4 percent of non-FHA loans and 5.1 percent of total loans. Hispanic/Latinx residents
comprise 12.6 percent of Massachusetts’ population, but received just 6.6 percent of non-FHA loans and 9.4 percent of total loans.

Conversely, Black and Hispanic borrowers received disproportionate shares of comparatively higher-cost FHA loans (15.3 percent to Black borrowers and 26.7
percent for Hispanic borrowers).

Much of that FHA activity occurred in Gateway Cities with approximately half of all mortgages in Springfield, Brockton, New Bedford and Lawrence being FHA loans.

Perhaps surprisingly given rapid increases in home prices, mortgage lending to low and moderate-income borrowers remained steady with 32 percent of all home
purchase mortgage going to households making less than 80 percent of the area median income.

Geographic distribution
Total home-purchase lending to households of color in 2020 was concentrated in a relatively small number of the state!s cities and towns, and entirely absent in many
other locales.

Just five cities (Boston, Springfield, Worcester, Brockton and Taunton) accounted for 38 percent of all loans to Blacks in Massachusetts. That percentage is down from just two years ago when the top five communities accounted for 46 percent of all loans to Black borrowers. At the same time, Black borrowers received no home-purchase loans in 107 of the state’s 351 cities and towns. Some municipalities had especially high representations of Black borrowers. For example, in 2020, Taunton’s Black residents comprised 7 percent of the population yet accounted for 23 percent of all loans. Similarly, Fall River’s population was 6 percent Black in 2020, and 17 percent of loans that year went to Black borrowers. Five communities (Boston, Springfield, Worcester, Lawrence and Lynn) accounted for 29 percent of all loans to Hispanics in Massachusetts. Five communities (Boston, Quincy, Lowell, Lexington and Newton) accounted for 23 percent of all loans to Asians in Massachusetts.

Loans to Black borrowers in the city of Boston were heavily concentrated in just a few neighborhoods. The five neighborhoods with the most loans to Black borrowers (Dorchester, Hyde Park, Mattapan, Roxbury, and Jamaica Plain) accounted for 81 percent of all loans to Black borrowers in Boston. With the exception of Jamaica Plain, loans to Black borrowers declined in all of these neighborhoods from 2019 to 2020. •Loans to Black borrowers across all of Boston decreased from 2019 to 2020 by exactly 50 loans from 306 to 256.

Mortgage Denials
A major finding of the report focuses on denials of mortgage applicants who are ostensibly best situated to buy a home. These applicants are those who are prepared to buy with a 20 percent down payment or higher, have relatively modest overall debt and earn above the area median income. Just looking at this group, the report finds that Black, Asian and Hispanic applicants are denied loans at rates higher than similarly situated white borrowers.

• Black borrowers with down payments of 20 percent or higher are denied at a 13 percent rate, Hispanic borrowers at 9 percent, Asian borrowers at 6 percent and white borrowers at 5 percent.
• It is also worth noting that Black and Hispanic/Latinx borrowers meet this criterion at vastly different rates than white and Asian borrowers. While 47 percent of Asian borrowers and 34 percent of white borrowers have a loan-to-value ratio of less than or equal to 80 percent, only 9 percent of Black and 13 percent of Hispanic/Latinx borrowers meet that criteria.

Most Active Lenders

• In 2020, independent mortgage companies accounted for the largest share of home purchase loans, originating 54 percent of all loans made in Massachusetts. This is the first-time in the history of the data that mortgage companies originated more than half of all mortgage loans in the state. Massachusetts banks originated 29 percent of mortgages, out-of-state lenders 12 percent, and credit unions five percent.
• Of the ten most active lenders in Massachusetts overall, seven are mortgage companies and three are Massachusetts banks (Leader Bank, Citizens and Salem Five).
• Guaranteed Rate was the most active lender in Massachusetts by loan count, with 5,023 loans originated. Fairway Independent Mortgage Company ranked second with 4,008 loans, Residential Mortgage Services ranked third with 3,850 loans and Leader Bank was fourth with 3,511.
• The top ten lenders originated more than one third of all home purchase loans in Massachusetts. The top thirty lenders made nearly 60 percent of all home purchase loans.
• Wells Fargo ranked as the 11th most active lender in the state in 2020 but was 49th and 54th in lending to Black and Hispanic borrowers respectively.