Minority Real Estate Coalition Offers Plan To Stabilize Market

The combined 70,500 members and affiliates of the National Association of Hispanic Real Estate Professionals, The Asian Real Estate Association of America (AREAA) and the National Association of Real Estate Brokers (NAREB) introduced The Five-Point Plan: Creating A Sustainable Path to Minority Homeownership during their 2010 Multicultural Real Estate & Policy Conference this week in Washington, D.C. Leaders from the three national trade groups are appealing to lawmakers during Capitol Hill visits to take actions that stabilize the market, expand consumer protections, preserve liquidity and stop the spiral of losses in minority communities.

"Communities of color remain at great risk. We must take common sense actions that stop the spiral of losses, keep homeowners in place and prevent our neighborhoods from becoming renter communities," said incoming NAHREP Chairman Alex Chaparro. "Lawmakers are looking to the real estate industry to collaborate on solutions that balance the role of government and private enterprise. We believe this plan does that."

The three trade associations, which represent the most impacted communities, call 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 the role of the GSE's and FHA to expand the flow of stable capital to the mortgage market
5. Promotes the role of a consumer protection agency that puts consumer interests first and is empowered to implement robust reforms that align industry practices with values that serve the common good.

Current government programs, while well intended, have had limited impact especially in minority neighborhoods where the incidence of expensive mortgages and higher unemployment is greater. (At the peak of the housing expansion, African Americans and Latinos held high cost mortgages at two to nine times the frequency of whites in some foreclosure regions.) According to a report from the Federal Reserve, African American borrowers were 1.8 times as likely as white borrowers to be in foreclosure and Latino and Asian borrowers were 1.4 and 1.3 times, respectively, to be in foreclosure.

Homeownership among African Americans and Latinos varies by region. For Latinos, the greatest proportion of homeowners is based in the West and Midwest. Among African Americans, homeownership is most concentrated in the Midwest and the South. One-third of the nation's Asian population is based in California. The foreclosure crisis has turned into a regional phenomenon. Minorities reside in many of the states suffering the highest rates of foreclosures and home devaluations including: Nevada, California, Arizona, Florida, Illinois, Ohio and Michigan.

A copy of The Five-Point Plan: Creating A Sustainable Path to Minority Homeownership is available at www.nahrep.org, www.areaa.org or www.nareb.com.