Declining Market Policies Have Disparate Impact On Minorities, Lower Income Neighborhoods, Say Multicultural Real Estate Professionals
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minorities, Mortgage News April 1st, 2008WASHINGTON, D.C.–(BUSINESS WIRE)–Hispanic, Asian and African American real estate professionals believe that new lending policies have unintended consequences for vulnerable minority and low- to moderate-income families, according to a survey of 1135 combined members of the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America (AREAA) and the National Association of Real Estate Brokers. Representing a combined membership of over 70,000 real estate professionals, the poll of multicultural professionals was the impetus for a set of recommendations issued last week by the three groups at the Legislative Conference hosted by NAHREP. At issue, is a growing concern that outside the current mortgage foreclosure crisis, minorities will face even greater barriers to homeownership.
“This study confirms that minorities are experiencing a much greater than anticipated hit from declining market policies,” says outgoing NAHREP Chair Felix DeHerrera. “In effect, the consequence of these policies is a near complete suspension of financing resources to communities that need it most.”
Declining markets policies are implemented by GSE’s, Lenders, and Mortgage Insurance companies in areas where home values are declining, or where home values are difficult to determine. In cases where homes are in declining markets, GSE’s, lenders, and mortgage insurance companies policies increase pricing to deliver home purchase and refinance loans to consumers. In most instances, the policies also require higher down payment requirements as well.
The survey- including opinions from minority real estate agents, brokers, mortgage professionals and settlement service providers – revealed the following:
62 percent of minority real estate professionals are concerned about declining market policies; 35 percent say minority and lower income areas have experienced a disparate impact of the policies; 27 percent are worried that some lenders may act too quickly to identify minority neighborhoods as being declining markets;
55 percent say that 2 out of every 3 customers must be turned down because they owe more than their homes are worth;
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