Real Estate Groups Collaborate to Avoid Minority Homeownership Losses
The disproportionate economic losses impacting minorities in the housing downturn, has led the combined 70,500 members and affiliates of the Asian Real Estate Assn. of America (AREAA), the National Assn. of Hispanic Real Estate Professionals (NAHREP) and the National Assn. of Real Estate Brokers (NAREB) to recommend a five-point plan that protects homeownership for people of color. Leaders from the three national trade groups called for an unprecedented collaboration between lawmakers, regulators and the housing industry in an effort to prevent a roll back in minority homeownership gains.
“More homeowners in the minority community have been impacted in the subprime foreclosure crisis than any other homeowner group,” said incoming NAHREP Chair Rebecca Gallardo-Serrano. “Our communities are at great risk. We must be working collaboratively with lawmakers to save distressed homeowners and preserve options for future buyers. This is the focus of our plan.”
The three organizations support a five-point plan that calls for action to preserve homeownership, reverse declining markets policies, increase multicultural counseling and outreach, restore consumer confidence, protect the housing system and create liquidity. The plan was announced this week at the NAHREP annual legislative conference. In an unprecedented move, members of the three groups came together as a demonstration of unity on the key issues facing minorities.
“There is the very real, and overwhelming potential here to disenfranchise minority and low- to moderate- income homeowners as the market adopts new standards in an effort to avoid risk. Today, hundreds of thousands of homeowners are either in foreclosure or at the very brink,” stated NAREB President and CEO Maria Kong. “We must ensure that sustainable homeownership remains a viable option for Americans of all economic means so that our communities remain vibrant, affordable, diverse, and desirable places to live,” Kong added.
Recent reports have warned that minority homeowners do not have the equity or access to traditional mortgage products to help deal with their mortgage and financial obligations. Minority real estate leaders are concerned that if current mortgage default and foreclosure trends continue without intervention, the losses will wipe out minority homeownership gains made in recent years.
A January 2008 report issued by United for a Fair Economy predicts subprime borrowers of color will lose between $164 billion and $213 billion for loans taken during the past eight years.
“The spillover effect of subprime and Alt-A loans issued to minority consumers negatively affects entire communities,” says AREAA Chair Emily Fu. “These losses among minority, low- and moderate-income consumers have the potential to result in abandoned homes, increased crime, devaluation of neighboring properties and loss of tax revenues to support community services.”
Noteworthy actions cited in the coalition's plan include:
- A single, consistent industry policy for identifying and assessing declining markets;
- The creation of a declining markets second mortgage fund;
- The creation of new Community Reinvestment Act (CRA) requirements and incentives for banks to pursue innovative loss mitigation and foreclosure prevention initiatives;
- Required CRA reviews of Real Estate Owned (REO) property disposition strategies;
- Regulatory oversight of Wall Street firms involved in origination and servicing business;
- Federal and state licensure and education standards for all mortgage professionals.
Leaders from the Hispanic, Asian and African American trade groups will meet with lawmakers in April to discuss the tenets of the plan. The associations have collaborated on joint positions in the past, but this is the first plan they have recommended together. The coalition also plans to share with elected officials results from member opinion surveys on the proposed bills under consideration and current marketplace conditions. A copy of the America’s Multicultural Real Estate Associations Five Point Plan of Action is available at www.nahrep.org, http://www.nahrep.org, www.areaa.org, http://www.areaa.org, www.nareb.com.
The National Assn. 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.
Established in 2003, the Asian Real Estate Assn. 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.
NAREB, founded 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.
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