WASHINGTON — An analysis of the latest HMDA data indicates that while the credit crunch has lead to higher denial rates, CUs are still more likely to approve mortgage loans for minorities and low- to moderate-income borrowers.

Overall, blacks and Hispanics saw much higher denial rates than whites in 2007, and there was a noticeable increase in minority denial rates between 2006 and 2007. While all borrowers were subject to tighter credit standards, minorities and low-income borrowers felt more of it. According to the latest HMDA numbers, mortgages made to African-American borrowers dropped 34% between 2006 and 2007. The decline was even larger for Hispanics–41%. The decline in loans made to Caucasian borrowers was 15%, the new data reveals.

Denial rates for home borrowers based on race widened significantly from 2006 to 2007, according to an analysis performed by Sen. Christopher Dodd (D-Conn.), chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs. Dodd called that pattern "proof of a disturbing and continuing trend of unfair lending practices" faced by minority purchasers and said that the committee will continue to focus on how to end discriminatory lending practices.