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Jim Park, President & CEO of AREAA and Maria Kong, President & CEO of NAREB converse during precedent-setting Multicultural Real Estate Conference held in Washington, DC.
WASHINGTON, D.C. (April 14, 2008) – African American, Hispanic, and Asian 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 1,135 combined members of the National Association of National Association of Real Estate Brokers (NAREB), Hispanic Real Estate Professionals (NAHREP), and the Asian Real Estate Association of America (AREAA). 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 during a first-ever meeting convened by the three groups in conjunction with NAHREP’s annual Legislative Conference. At issue, is a growing concern that outside the current mortgage foreclosure crisis, minorities will face even greater barriers to homeownership.
“We’ve very concerned that minority communities are bearing the brunt of declining market policies,” stated Maria Kong, President and CEO of NAREB, the 35,000-member trade group, primarily comprised of African-American real estate professionals. “We’re looking at the further destabilization of our communities with policies that serve to halt financing in the communities that most need resuscitation and focused assistance, Kong added.
Declining markets policies are implemented by GSEs, 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, GSEs, 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.
The survey, conducted in mid-March of this year, 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;
69 percent say that for every transaction they close, 2-4 customers are turned away who are unable to qualify for a mortgage under declining market guidelines;
34 percent believe legislation aimed at modifying existing mortgage loans could be effective in curbing current foreclosures;
48 percent favor creating a national foreclosure fund to help distressed borrowers with realistic loan modifications and workouts including the use of soft seconds;
65 percent say they know at least five real estate professionals who had to find outside work due to a failed real estate or mortgage based business, and
64 percent say these job losses will result in increasing barriers to homeownership for minorities.
Out of the 1,135 survey respondents, 74 percent were realtors; 18 percent were mortgage lenders and 8 percent provided other services. Member opinions on current legislative proposals captured in a live audience poll at the legislative meetings will be published and issued in the coming weeks by the three groups.
The three organizations introduced a 5-point plan to address these, and other issues related to the challenges in the real estate lending market. The plan includes:
Protect home ownership gains achieved by minority consumers over the last several years;
Reverse declining markets policies that threaten the ability of borrowers to qualify for loans to purchase and refinance their homes;
Increase multicultural counseling and outreach, and require that servicers provide loss mitigation options in the language in which the borrower is most proficient;
Restore the public’s trust and confidence in the lending process by ensuring the highest ethical standards of service by real estate professionals, and
Protect the housing system and add Liquidity to the market by passing FHA and GSE reform bills.
About NAREB
The National Association of Real Estate Brokers, established in 1947, was formed out of a need to secure the right to equal housing opportunities regardless of race, creed, or color. Since its inception, NAREB has participated in and promoted meaningful challenges and legislative initiatives to ensure fair housing for all Americans now with membership topping 35,000 Realtists® in 84 chapters nationwide. For more information, visit the website at: www.nareb.com.
About NAHREP
The National Association of Hispanic Real Estate Professionals, a non-profit 501c6 trade association, is dedicated to increasing the homeownership rate among Latinos by educating and empowering the real estate professionals that serve them. Based in Washington D.C., NAHREP is the premier trade organization for Hispanics and has more than 15,500 members in 48 states and 62 affiliate chapters.
About AREAA
Established in 2003, the Asian Real Estate Association of America’s membership represents a broad array of real estate, mortgage and housing-related professionals that serve the diverse Asian/Pacific-American market. AREAA is the only national trade association dedicated to representing the interest of the Asian real estate market throughout the country. It pursues initiatives that expand home ownership opportunities for more Asian/Pacific-American families, that increase business opportunities for its members, and that deliver tangible results for its national partners.
# # # # #
Note to media: Copies of the 5-point plan is available upon request.
Jim Park, President & CEO of AREAA and Maria Kong, President & CEO of NAREB converse during precedent-setting Multicultural Real Estate Conference held in Washington, DC.
WASHINGTON, D.C. (April 14, 2008) – African American, Hispanic, and Asian 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 1,135 combined members of the National Association of National Association of Real Estate Brokers (NAREB), Hispanic Real Estate Professionals (NAHREP), and the Asian Real Estate Association of America (AREAA). 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 during a first-ever meeting convened by the three groups in conjunction with NAHREP’s annual Legislative Conference. At issue, is a growing concern that outside the current mortgage foreclosure crisis, minorities will face even greater barriers to homeownership.
“We’ve very concerned that minority communities are bearing the brunt of declining market policies,” stated Maria Kong, President and CEO of NAREB, the 35,000-member trade group, primarily comprised of African-American real estate professionals. “We’re looking at the further destabilization of our communities with policies that serve to halt financing in the communities that most need resuscitation and focused assistance, Kong added.
Declining markets policies are implemented by GSEs, 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, GSEs, 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.
The survey, conducted in mid-March of this year, 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;
69 percent say that for every transaction they close, 2-4 customers are turned away who are unable to qualify for a mortgage under declining market guidelines;
34 percent believe legislation aimed at modifying existing mortgage loans could be effective in curbing current foreclosures;
48 percent favor creating a national foreclosure fund to help distressed borrowers with realistic loan modifications and workouts including the use of soft seconds;
65 percent say they know at least five real estate professionals who had to find outside work due to a failed real estate or mortgage based business, and
64 percent say these job losses will result in increasing barriers to homeownership for minorities.
Out of the 1,135 survey respondents, 74 percent were realtors; 18 percent were mortgage lenders and 8 percent provided other services. Member opinions on current legislative proposals captured in a live audience poll at the legislative meetings will be published and issued in the coming weeks by the three groups.
The three organizations introduced a 5-point plan to address these, and other issues related to the challenges in the real estate lending market. The plan includes:
Protect home ownership gains achieved by minority consumers over the last several years;
Reverse declining markets policies that threaten the ability of borrowers to qualify for loans to purchase and refinance their homes;
Increase multicultural counseling and outreach, and require that servicers provide loss mitigation options in the language in which the borrower is most proficient;
Restore the public’s trust and confidence in the lending process by ensuring the highest ethical standards of service by real estate professionals, and
Protect the housing system and add Liquidity to the market by passing FHA and GSE reform bills.
About NAREB
The National Association of Real Estate Brokers, established in 1947, was formed out of a need to secure the right to equal housing opportunities regardless of race, creed, or color. Since its inception, NAREB has participated in and promoted meaningful challenges and legislative initiatives to ensure fair housing for all Americans now with membership topping 35,000 Realtists® in 84 chapters nationwide. For more information, visit the website at: www.nareb.com.
About NAHREP
The National Association of Hispanic Real Estate Professionals, a non-profit 501c6 trade association, is dedicated to increasing the homeownership rate among Latinos by educating and empowering the real estate professionals that serve them. Based in Washington D.C., NAHREP is the premier trade organization for Hispanics and has more than 15,500 members in 48 states and 62 affiliate chapters.
About AREAA
Established in 2003, the Asian Real Estate Association of America’s membership represents a broad array of real estate, mortgage and housing-related professionals that serve the diverse Asian/Pacific-American market. AREAA is the only national trade association dedicated to representing the interest of the Asian real estate market throughout the country. It pursues initiatives that expand home ownership opportunities for more Asian/Pacific-American families, that increase business opportunities for its members, and that deliver tangible results for its national partners.
# # # # #
Note to media: Copies of the 5-point plan is available upon request.
