Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, October 14, 1993 TAG: 9310140127
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Major banks serving Western Virginia say they are attracting more minority customers even though they still are denying mortgages to many applicants.
In reports filed with federal regulators, six statewide banks said they received 276 applications from Roanoke-area minorities last year, an increase of 30.8 percent from 211 in 1991.
The reports for 1992 must be submitted to the government at this time of year under terms of the Home Mortgage Discrimination Act. The statistics are included in a national report expected to be released next month by federal mortgage regulators.
Figures, detailed in a chart on page B7, reflect lending in the Roanoke Valley except for First Virginia, whose statistics cover a wider territory.
The 1992 figures for Dominion Bank, which on Friday changes its name to First Union National Bank of Virginia, are only for home improvement loans covered by a mortgage. Dominion's mortgage subsidiary was sold in March, at the time of Dominion's merger into First Union Corp.
Dominion's abbreviated report tends to reduce the number of overall and minority applicants for last year.
The reports for 1992 follow intensive efforts by all of Virginia's major banks to attract minority customers. The banks have conducted seminars, had displays at community fairs and worked with agencies such as Total Action Against Poverty and Consumer Credit Counseling.
"We just keep trying," said Jane Henderson, compliance officer for First Union National Bank. Yet the ratio for Dominion-First Union improved only marginally.
Last year, Dominion rejected about 23 percent of the 53 black applicants for mortgages, compared with 34 percent of 74 black customers in 1991.
Like other lenders, Dominion-First Union requires a second appraisal by another loan officer before any application can be rejected.
Although the bank is engaged in an "active" outreach program to recruit minority customers, Henderson said, the program may not pay off for several years.
One reason is banks are barred by law from setting up specific programs aimed at blacks, Hispanics or other minorities, Henderson said. That means their applications must stand up to the same credit standards as that of any other customer.
Most applicants, black or white, are rejected for one of two reasons, he said:
A high ratio of debt to income, which means the rejected applicant must pay down other debts before reapplying for a home loan.
A bad credit history, for failure to pay old debts for example. Henderson said it takes about two years to overcome that problem.
First Virginia Bank, which failed to improve its denial ratio, attracted 28 black mortgage applicants last year, up from six in 1991, said Vice President Ellis Gutshall.
Gutshall said First Virginia boosted its figures through outreach programs and advertising in publications targeted at blacks.
Crestar Bank had the lowest rejection rates for both black and white applicants in 1992, as it did the prior year. Vonda Eanes, compliance officer for Crestar in Roanoke, credited both an "aggressive" outreach program and calls on builders and real estate agents.
Crestar worked with local agencies and sponsored home-buyer workshops. As a result, she said, Crestar attracted more qualified candidates for mortgages, both black and white.
Rustam N. Wadia, community investment coordinator for NationsBank in Roanoke, said the bank tried to reach out to moderate-income applicants. As a result, NationsBank attracted 95 minority applications last year compared to 68 in 1991.
Central Fidelity Bank, which reported two black applicants last year, attracted only one this year. That person was denied.
Linda Fritsch, compliance officer for Central Fidelity, said it has expanded its outreach in an attempt to find as many applicants as possible.
The 1992 results were disappointing for Central Fidelity and all banks, Fritsch said, but the work is paying off this year. "We will have remarkable results for 1993," she said.
by CNB