According to a coalition of Black, Asian and Hispanic real estate professionals, “this generation of minority communities have suffered significant declines in wealth due to loss of their homes”. There’s a need minorities come together and “get into the weeds” on this important issue. It’s an issue worth rising. Typically, the median net worth of a renter household is $4,800, while the median net worth of a homeowner household is $171,700. But, minority homeowners have suffered the greatest impacts of foreclosures and falling home prices. Losses of housing wealth among African, Asian and Hispanic communities could exceed $200 billion by 2011. The culprits were predatory lenders and uneducated consumers. By 2006 more than one-fifth of all mortgages in the United States were subprime.
With higher interest rates and higher fees and penalties than conventional mortgages, subprime loans qualified individuals who otherwise couldn't get a loan because of low income or bad credit history. At the peak of the housing expansion, in some foreclosure areas African and Latino Americans held high cost mortgages at two to nine times the frequency of Whites. According to the Federal Reserve, African American borrowers were 1.8 times as likely as Whites to be in foreclosure - Latino and Asian borrowers were 1.4 and 1.3 times.
A group of Black real estate professionals has joined into a multi-cultural initiative to restore homeownership to its “rightful place” as part of people of color’s “American Dream”. The National Association of Real Estate Brokers (NAREB) was formed in 1947 “to secure the right to equal housing opportunities”. NAREB executives say: “It is time we recognize our challenges. African-Americans own fewer homes with less value, and often pay more to get and keep them. Until we lay a stronger foundation for sustained, and sustainable, growth in African-American homeownership, our communities will remain dangerously exposed”. NAREB members, along with Asian and Hispanic housing leaders, went to Washington recently to get actions on the part of Congress to stop the spiraling and disproportionate housing losses among minorities.
Speaking for communities most impacted by the housing crisis, African, Asian and Hispanic housing trade associations are calling for support of a Five-Point Plan that: 1) Expands the scope of Community Reinvestment Act (CRA) functions to include loan servicing; 2) Mandates pre-purchase face-to-face homebuyer education and household budget management training; 3) Provides principal forgiveness for homeowners that are underwater on their mortgage and have more than 10 percent negative equity; 4) Advocates government agencies expand the flow of stable capital to mortgage markets; and 5) Promotes a consumer protection agency empowered to implement robust reforms that align industry practices.
Four million American homeowners face foreclosure. The collaborative effort among African-Hispanic-and-Asian-American real estate professionals focus on curbing foreclosure rates and growing homeownership and wealth in areas where they work and live. “Communities and people we serve deserve this kind of comprehensive approach" says NAREB Vice President Ron Cooper. The “Five Point Plan: Creating A Sustainable Path to Minority Homeownership” deserves support to set new courses for minority communities in the nation's housing recovery. “The five-point plan offers a solutions-based approach to making homeownership, not only sustainable, but desirable for communities of color,” said Cooper. Although President Barack Obama’s Homeowner Affordability and Stability Plan concurs in many ways with the minority realtors’ Five Point Plan, it’s time to recognize structural inequities, cease being colorblind, and support NAREB & Co. on this issue. It’s an important distinction. Current government programs, while well intended, have had limited impact in minority neighborhoods.
(William Reed – www.BlackPressInternational.com)