This paper analyzes California mortgage originations in the post-crisis period, from 2012–2014, using data collected under the Home Mortgage Disclosure Act (HMDA). Similar national analysis provides context for the state-wide observations. Analysis in four large California counties shows the variety of experiences across this large state. The main findings include:

  • National and state-wide analysis reveal a reduction in mortgage credit for the loans that most clearly support homeownership overall. More loans that directly supported homeownership were made in 2000 than in 2014.
  • Some borrowers are particularly shut out, including non-White borrowers, lower-income borrowers, and those in neighborhoods with lower incomes. This is true nationally and in California.
  • Analysis of the loans that were made to these target populations in California reveal:
    • More than half of loans made to Black/African-American and Latino borrowers, lower-income borrowers, and those in lower-income census tracts were government-backed loans (including FHA). Conventional loans, including those supported by Fannie Mae and Freddie Mac, overwhelmingly did not go to these target groups.
    • More than two-thirds of homebuyers in every race/ethnicity group had middle or high incomes for their area.
    • Most Black/African American and Latino borrowers bought homes in majority minority census tracts, even though most had middle or high incomes.
    • Smaller lenders focused on these populations and geographies compared with larger lenders. The largest lenders in the state made the most loans to these target populations, but they typically made up a small share of overall originations.
  • Within California, different areas and regions differ in the degree to which non-White and low-income borrowers are accessing homeownership.

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