The report found that minorities were denied mortgages 23.8% of the time, while whites were denied mortgages 10.1% of the time in the Milwaukee, Waukesha, Ozaukee and Washington counties.

That denial rate disparity of 2.4 to 1 in 2004 is a decrease from 3.1 to 1 in 2003. The change was due in large part to the increase in the white denial rate, which rose from 7.4% to 10.1%, the report says.

Along with Philadelphia, the Milwaukee area leads the nation's 50 largest metro areas in the racial denial rate disparity, says the report, which is based on federal data from the census, the Home Mortgage Disclosure Act and the Community Reinvestment Act.

The average disparity rate for the 50 metro areas is 1.6 to 1, the report states. According to the report, the loan denial rate for Milwaukee-area white applicants remains among the lowest in the nation. The report is based on 2004 data, the latest available.

The local white denial rate of 10.1% compares with the average of 14.1% for the nation's 50 biggest metro areas. The non-white denial rate in Milwaukee of 23.8% was almost identical to the average of 23.4% for large metro areas.

"You're looking at above-average approval rates for whites, which skews in many ways and overshadows the continuing drop in the denial rates for non-whites," said Kurt Bauer, president and chief executive of the Wisconsin Bankers Association.

Bauer said banks, which represent only one portion of lenders that make mortgage loans, are highly regulated financial institutions that do not discriminate based on race.

"It does not make any business sense to deny creditworthy people loans," Bauer said. "It's a highly competitive market, which means that people of all colors, all ethnic and racial backgrounds benefit.

"It's a buyer's market. There are lenders out there that want that business. And they are going to look for ways to say, 'Yes.' The problem comes with credit history - what pitfalls have you had in the past? That, more than anything else, determines your creditworthiness."

While the report covers lending in the entire metro area, it draws attention to a target area in the city of Milwaukee with low-income residents, lower-valued homes and lower homeownership. It's roughly the area designated as eligible for federal community development block grants, which assist low- and moderate-income areas.

Ald. Joe Davis Jr., the chairman of the city's Community and Economic Development Committee, said this week that his main concern is that the report uses the 1990 census boundaries for the target area. The 2000 census showed that low-income residents now live in more parts of the city, particularly to the northwest, and that some formerly blighted areas have been redeveloped, and the report ought to take that into account, he said.

City Comptroller W. Martin Morics said that the report uses 1990 figures as a base for comparative purposes and to show the progress over the years.

The main purpose of the report is to provide disclosure of mortgage lending practices so that lenders and others can be mindful of the trend and work to improve it, he said.

In the next year or so, it might be necessary to redefine the target area to reflect the changes in demographics and development activity, Morics said.

Bethany Sanchez of the Metropolitan Milwaukee Fair Housing Council said it's good to highlight the needs and deficits of mortgage lending, but there continues to be a concern with the high cost of predatory loans, which result when some home buyers can't get conventional rate mortgages.

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