Closing the Gap: There Are Serious Efforts under Way to Dramatically Boost the Homeownership Rates for African Americans. One Observer Says the Industry Has Gotten "Religion" over the Challenge of Putting More Minorities in Homes, and It Is Showing Results

By Bergsman, Steve | Mortgage Banking, February 2004 | Go to article overview

Closing the Gap: There Are Serious Efforts under Way to Dramatically Boost the Homeownership Rates for African Americans. One Observer Says the Industry Has Gotten "Religion" over the Challenge of Putting More Minorities in Homes, and It Is Showing Results


Bergsman, Steve, Mortgage Banking


OVER THE PAST THREE YEARS, MANY OF THE COUNTRY'S LARGE AND MIDSIZED LENDING institutions have rolled out programs to increase homeownership among the nation's minority populations. The commitment to bring mortgage dollars to potential minority homeowners now totals in the billions. Not only have government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac created new programs, but so have some of the biggest mortgage originators in the country. * Count among these companies Countrywide Financial Corporation, Calabasas, California; Washington Mutual Inc. (WaMu), Seattle; J.P. Morgan Chase & Co., New York; and CitiMortgage Inc., St. Louis. * Simply throwing dollars at the problem of improving minority homeownership, however, is not the solution. There are numerous financial and cultural hurdles that in the past have prevented minorities, in particular Hispanics and African Americans, from reaching the same homeownership rates as the majority of Americans. * While homeownership among Hispanics is still lower than among African Americans, there is a fear the latter group will not expand at the rate of the former. * Third-quarter 2003 data released by the U.S. Commerce Department data in October shows the percentage of American households that own their own homes expanded to 68.4 percent, the highest level ever. The same data also notes a very large gap between overall national figures and minority homeownership rates, with 46.1 of Hispanic households owning a home and 48 percent of African-American households owning a home. * The Association of Community Organizations for Reform Now (ACORN), Washington, D.C., parsed those numbers even more. An ACORN study released in October 2003 reports that African Americans comprise 13 percent of the population, but received just 5.1 percent of conventional purchase loans in 2002. This is a slight increase from 2001, but a decrease from 1997, when they received 5.5 percent of such loans.

In contrast, Hispanics comprise 12.5 percent of the population and received 8.5 percent of purchase loans in 2002, up 13.3 percent from 2001 and an increase of 60 percent from 1997.

Also, from 2001 to 2002 all home-purchase loans to Asians increased by 18 percent, to Hispanics by 11 percent, to Native Americans by 23 percent and to African Americans by 2 percent, reports Freddie Mac.

"African Americans as a group have undergone tremendous amounts of discrimination with regard to the home-purchase environment, so there is a historical belief in many quarters that the African American is not going to get a fair shake by players in the mortgage finance system," explains Scott Syphax, president and chief executive officer of Nehemiah Corporation of California, Sacramento, California, a privately funded charitable organization that provides down-payment assistance.

This level of cultural mistrust is "unique to the African-American population, "Syphax adds, and it is a remnant of what happened historically. Other cultural problems dog the process as well, including a lack of generational traditions of homeownership and the absence, in many cases, of financial literacy.

African Americans have the highest denial rate of groups of applicants for home-purchase loans--26 percent--says Michael Coffey, vice president of expanding markets for Freddie Mac. "That compares to 18 percent with Hispanics, 12 percent with whites and 10 percent with Asians," he says.

A special report entitled Insights into the Minority Homebuying Experience, produced by the Research Institute for Housing America (RIHA) and the Mortgage Bankers Association (MBA), Washington, D.C., reported five key hurdles in reaching out to minority communities in regard to mortgage lending. One of those issues was "finding trusted friends/advisers with knowledge of the business." An added highlight to that finding noted "although most participants were not able to cite specific personal situations in which they felt they were discriminated against in the mortgage application/approval process, most felt, with varying degrees of vigor, that homebuyers from the African-American community were discriminated against in the home-buying process. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Closing the Gap: There Are Serious Efforts under Way to Dramatically Boost the Homeownership Rates for African Americans. One Observer Says the Industry Has Gotten "Religion" over the Challenge of Putting More Minorities in Homes, and It Is Showing Results
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.