Alex De La Campa’s parents still haven’t recovered from a 2008 foreclosure and he fears the coronavirus-induced economic collapse will leave them in an even deeper hole.

Prior to the last recession, they owned their home in Concord, Calif., a Bay Area city of 120,000 people where his father, a Mexican immigrant, was a police officer. Eventually, they found an affordable rental home that they sublet to make ends meet.

Now, their tenants are falling behind on their rent and De La Campa, a 31-year-old Navy veteran who has since graduated from college, is worried about whether he can continue sending money each month to keep them in their home.

“I felt like my military experience and my efforts in school had given me what I needed to catch up,” he said. “Since Covid, everything has been put on hold.”

The coronavirus pandemic has shattered the U.S. economy, but its effects are most acute on African-American, Latino and immigrant communities, driving down home-ownership rates even further, and worsening wealth inequality, say housing advocates. Housing is one of the key ways that families can build generational wealth that can be passed between generations and provide a buffer against financial shocks.

“Home ownership is how we build wealth,” said Yoselin Genao Estrella, the executive director of the Neighborhood Housing Services of Queens CDC Inc.

Disproportionate Impact

African-American and Latino communities were hammered by high foreclosure rates when the housing bubble burst in 2008, losing levels of wealth that far outpaced white communities. The Center for Responsible Lending says that black and Latino households lost as much as $1 trillion.

A 2013 study from the National Association of Real Estate Brokers, an industry group for black real estate professionals, found that 8% of African-American and Hispanic borrowers were foreclosure victims during the financial crisis, nearly double the rate for non-Hispanic white borrowers in the same period.

U.S. Census figures showed a home-ownership rate of 74% for non-Hispanic white Americans in the first quarter of 2020, while the black home-ownership rate stood at 44%, the Hispanic home-ownership rate stood at 49% and 59% of Asian borrowers owned their homes.

African Americans and Latinos account for far higher proportions of Covid-19 infections than their share of the overall U.S. population. They have lost jobs due to the pandemic’s economic fallout at a higher clip than whites as well, according to government statistics.

African-Americans and Latinos that are still working tend to be in fields deemed essential, like health care and food service, putting them at even higher infection rates.

‘Epicenter of the Epicenter’

These dynamics are playing out starkly in New York City. Elmhurst and Corona, two Queens neighborhoods with largely African-American and Latino populations, have significantly higher infection rates than Manhattan’s Upper East Side, which is wealthier and whiter.

Elmhurst is also home to Elmhurst Hospital, a city-run facility that has seen staggering numbers of Covid-19-infected patients and deaths, making it the “epicenter of the epicenter.”

The neighborhood has also seen high levels of job loss alongside the higher infection rates, which is making an unsettled housing environment even shakier, Genao Estrella said.

Citywide, only 27% of blacks and 17% of Hispanics owned their homes, according to New York University’s Furman Center for Real Estate and Urban Policy.

Many of the primarily African-American and Latino homeowners in the neighborhoods where Genao Estrella works are also small landlords, offering more affordable rental rates, she said.

As job losses mount, and renters aren’t able to pay, there is a danger that a second foreclosure wave could hit, she said.

“If one of their tenants lost their job, it’s going to have ramifications immediately,” Genao Estrella said.

Queens, particularly African-American and Latino neighborhoods, was hardest among New York City’s boroughs during the financial crisis. Home owners became renters. If they lose their rental homes in this crisis, there are questions about what will happen next.

‘Feels Like You’re Doggy Paddling’

The situation is playing out across the country.

Little Rock, Ark., saw around two-thirds of its affordable housing stock disappear after the housing bubble burst in 2008, according to Martie North, the president of the Arkansas Coalition of Housing and Neighborhood Growth and Empowerment’s board of directors.

The slowdown in economic activity is likely to make the housing situation worse for both owners and renters, North, who is also the Community Reinvestment Act director at Simmons Bank, said.

“It just seems like it’s never ending and it feels like you’re doggy paddling,” she said.

In Santa Ana, Calif., Isabelle Lopez, 55, lost her sister and her mother-in-law to coronavirus, and now she’s worried about losing her home.

Lopez, 55, receives $1,043 per month in Medicare disability payments. Her husband, a Mexican immigrant who has lived legally in the U.S. for 25 years, lost his job as the California economy shut down to combat Covid-19. His work authorization has since expired, and he hasn’t been able to renew it because the local immigration office is closed.

Lopez and her husband have been homeless before, a result of displacements from the 2008 financial crisis. And she fears that could happen again.

“We’re already in crisis and then this came around. And we’re like walking zombies,” Lopez said in an interview with Bloomberg Law. “We don’t know whether to pay rent, to eat or go homeless.”

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CREDITS: Evan Weinberger / Bloomberg Law

The post Coronavirus Could Be New Housing Crisis for Communities of Color appeared first on National Association of Real Estate Brokers.

By Buck Wargo

A national organization of real estate professionals is coming to Las Vegas in February to “declare war on the decline of black homeownership” and given the rates in Southern Nevada, it will be the perfect locale to spread that message.

The midwinter conference of the National Association of Real Estate Brokers, the oldest minority trade association in the nation, runs Feb. 8-13 at The Mirage. Some 800 to 1,000 people are expected from throughout the nation, nearly doubling what such conferences normally draw. About 100 local real estate professionals are expected to attend.

Las Vegas Realtor Shanta Patton, a regional vice president with NAREB and the national education chair in charge of setting up the agenda for the February conference, said the theme of the conference has been driven by new NAREB President Donnell Williams, who’s leading the charge to increase black homeownership.

“We’re doing our campaign of sounding the alarm on black homeownership, and we see more conversations happening because we’re putting that positive focus on it,” Patton said. “We’re seeing momentum that we haven’t seen in a while. We’re excited about the progress we’re making on the national level. It’s not near enough where we need it to be, but at least we can see an increase after declining year after year.”

A recent report on Las Vegas prepared by Apartment List showed that black homeownership is below the national average and has a wide gap between other ethnic groups.

The homeownership rate is 62 percent among whites, 54 percent among Hispanics but only 35 percent among blacks, according to the Census data for Las Vegas. Nationally, the homeownership rate is 70 percent for whites and 42 percent for blacks.

Having the conference in Las Vegas will focus local media attention on the issue, Patton said. The plan is to have members of Congress from Nevada participate in the discussion at a legislative luncheon to talk about homeownership among minorities and affordable housing in Las Vegas, she said.

“That will be our chance to bring light to this issue and our challenges,” Patton said. “We can also focus on what we are doing well and what we can do better.”

Patton said she has requested information from Federal Home Loan Mortgage Corp. for data dealing with homeownership rates and plans to talk about strategies going forward to help increase that rate.

“I recently sat on the panel with Henderson Mayor Debra March, and they had a roundtable on affordable housing and what it looks like for minorities,” Patton said. “I see more and more of our public officials being open to the conversation than they have ever been before. It’s a great opportunity for NAREB to get out there and educate our public officials on the need for affordable housing and the need to increase black homeownership and minority homeownership in general. We want to advocate for them and sound the alarm.”

Patton said a big part of the NAREB mission to help boost those numbers is pushing for an increase in homeownership rates among black millennials. A recent report by Apartment List said the black homeownership rate for millennials — 23 to 38 — is 28 percent in Las Vegas compared with 21 percent nationally.

NAREB produces an annual report called the State of Housing in Black America, which says there are 1.7 million mortgage-ready black millennials that are making more than $100,000 a year, but they’re still renting, Patton said.

“The president’s initiative is for millennials to purchase a home instead of a car first,” Patton said. “That’s typically the issue when it comes to qualification. Some of them have car payments upward of $800 or $900 a month.”

As for Las Vegas, Patton said more needs to be done here on educating millennials on financial literacy and the importance of homeownership. Many saw what their parents went through with the financial crisis, and that affected the whole family.

“Now, those children are adults and they stay away from the concept,” Patton said. “They want a simpler life and to them they can rent luxury apartments with all the amenities without any additional responsibilities. They don’t see the importance of homeownership, but only the bad of it with their parents. You have to focus on financial literacy and the importance of homeownership and why it makes more sense than renting and building generational wealth and equity.”

Patton said they’ve already made an impact by holding community wealth-building days dealing with literacy and credit reports and how to improve them.

“Locally, we’ve focused a lot on how to make that work,” Patton said. “We have done faith-based initiatives where we have gone into churches and teach the attendees on the importance of homeownership.”

The issue has come to greater focus, locally. The Review-Journal real estate section recently wrote about the gap in homeownership rates, and Patton said it’s not surprising the numbers are so low for Las Vegas.

“When you look at the gap between a non-minority homeowner and minority homeowners, it’s really sad,” Patton said. “But we have to remember it’s always been a big gap. Because of predatory lending, a lot of African-Americans lost their homeownership during the decline in the recession and have not been able to get that back.”

Mosi Gatling, president of the Las Vegas chapter of NAREB, said she has disseminated the article to partners and homebuilders and said many weren’t aware that there’s such a discrepancy over black homeownership.

“They’ve had no clue of the racial component,” Gatling said. “People have avoided the race breakdown and whether our local demographics have changed. People were enlightened to see those stats. It’s a big disparity, and now there’s something for us at NAREB to grab and develop a program at the state level to work on that.”

One option is giving people easier access to qualify for state down payment assistance programs, Gatling said.

Patton said that for African-Americans, purchasing a home is an emotional experience and a huge accomplishment as part of achieving the American dream. To have lost their home, it was more than a bad investment, she said.

“It was life-altering and because of that a lot of black homeowners don’t want to do that again,” Patton said. “One of the things we struggle with is trying to deal with the chance of it happening again. Until we deal with that, it will be difficult to show the importance to millennials and their children. It’s a process, and it starts with education.”

While Patton said it’s harder for lenders to put buyers in bad loans today given changes in practices, many lenders are unwilling to participate in down payment assistance programs. That’s vital because minority buyers have the opportunity to purchase, but they may not have the five, 10 or 20 percent down, she said.

“I think a lot of loan officers are not educating the buyers on the down payment assistance opportunities that we have here because they get paid less,” Patton said.

Early registration costs through Jan. 2 are $299 for NAREB members and $399 for non-members. The prices escalate as the conference approaches. For more information, visit events.eply.com/Mid-Winter-Conference-2020.

“The conference focuses on advocacy but training agents to function in today’s market and how to state competitive,” Patton said. “I hope Realtors will level up business and focus on customer experience and learning how to keep the customer relations but be powered by technology.”

CREDIT: Buck Wargo \ Las Vegas Review-Journal

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Residents are meeting up each month to learn about buying property as a way to build generational wealth

By Jessica Flores | @jesssmflores

For Daniel Carter, the strip mall where Nipsey Hussle was killed in March, is one of the most important places in South LA.

The late rapper was a South LA champion who invested in his community, in part by purchasing that shopping center at Crenshaw Boulevard and Slauson Avenue.

Hussle’s death “left a huge scar in the community,” says Carter, 35, a music business manager and real estate investor. “I felt like at one point his spirit kind of burst into a million pieces and everybody got a little piece… I feel like our piece of it was this real estate thing.”

After Hussle died, Carter launched Buy Back The Block L.A., a monthly meet up to educate South LA residents on how to fight gentrification by buying property in their neighborhoods.

Arlen Escarpeta, an actor and Inglewood native, is in the process of being pre-qualified to buy a home in Inglewood. He’s getting help from a broker he met from the group.

“I don’t know if I would be so much in the know of how and what’s going on [in real estate],” says Escarpeta, 38. “It would probably feel a lot more daunting if I didn’t have the education and the things that I’ve learned from the group.”

About 30 people gather each month in The Metaphor Club, a black-owned co-working space along Crenshaw Boulevard, across from Leimert Park Village. At each meet-up, Carter goes over real estate terms and definitions, offers advice on how to raise your credit score, and imparts the importance of buying homes in the neighborhood.

”We’re anti-gentrification, and we’re unapologetic about it,” he says. “We don’t want to see people who grew up in these neighborhoods get pushed out. This is our neighborhood. This is our culture. These are our streets.”

At a meeting in December, guest speaker Carlden Lainfiesta, a loan officer, highlighted a couple of programs that help qualifying homebuyers with down payments and closing costs.

In a county where the typical home costs $620,000, and where the majority of households rent, not own, those programs can be invaluable—especially for people of color, who, for decades, were locked out of homeownership.

The national rate of black homeownership is the lowest of any minority group, says Ashley Thomas III, an executive with the National Association of Real Estate Brokers, which is working to increase the number of black Americans who buy homes.

Thomas says he has seen more grassroots groups like Buy Back the Block L.A. pop up throughout the country, usually led by religious groups and musicians and actors.

“More people are trying to influence their family, and then their community, so you’re gonna see a lot of groups [like Buy Back the Block L.A], which is great,” he says.

Last year marked the 50-year anniversary of the Fair Housing Act, and Thomas says it opened up a lot of people’s eyes, because “we’re still at the same ownership rate in the black community that we were 50 years ago.”

The homeownership rate in Los Angeles is one of the lowest in the nation, with more than 64 percent of households renting, according to a 2018 Zillow report.

Black homeownership, in particular, has significantly dropped over the years nationwide.

Recent census data shows the national black homeownership rate at 40.6 percent in the second quarter, hitting its lowest point on record.

Gary Painter, director of the USC Sol Price Center for Social Innovation, says black homeownership rates in South LA are particularly low because of old discriminatory lending practices and racist housing policies.

In the early 20th century, it was common for developers and homeowner associations to require white homeowners to sign deeds that contained covenants promising to never sell to African Americans.

The area around Central Avenue, a street cutting through South LA, was one of the few places in the city where black people were allowed to buy property. But the government-sponsored Home Owners’ Loan Corporation deemed non-white neighborhoods “risky,” and its redlining maps not only discouraged and prevented community investments but made it difficult, if not impossible, for people of color to obtain home loans.

South LA resident Danielle Jakes says she knew nothing about real estate before joining the group.

“I love that everything [Carter] has learned, he brings back to us,” Jakes, 35, says. “So when we go out and hear different terms, we’ll know what they’re talking about.”

Jakes is part of a smaller group from Buy Back The Block L.A. who pooled their money to buy properties in Indiana. It’ll be her first time buying property. Eventually, she says, she wants to own a home for herself in South LA, where she lives near the intersection of Slauson and Western Avenue, but she’s still learning the ropes.

Jakes knew Hussle from their high school days at Hamilton High School. She says Buy Back The Block L.A. is more than just a group; they’re continuing Hussle’s legacy.

”We’re coming together and helping each other out just as Ermias [Hussle] did,” she says.

Carter says he chose Indiana because he already owns property in the state. He bought his first home in Palmdale, where he spent most of his childhood, and currently rents in Jefferson Park.

He says he hasn’t bought a home in South LA yet, because of how expensive it is.

“Going out of state where you can buy five houses for the price of one in LA gives you a chance to get in the game and start stacking your paper,” says Carter.

Carter owns 11 rental units in Indiana that he says he rents to tenants with Section 8 vouchers.

“I buy my houses in the hood, because I don’t mind owning in the hood,” he says. “I’m not necessarily flipping them, I’m buying them, and I’m holding them.”

“The negative side of flipping is when somebody comes in to our neighborhoods, you know, like what’s happening here in Echo Park, where these people who don’t grow up around here coming in flipping houses and raising the prices,” Carter says.

Jerome Wiley, a sixth grade educator, owns property in Los Angeles and Tennessee. He heard about Carter’s group through a friend and says that the idea of “investing with like-minded people who look like me drew my attention.”

“I’m glad to see that there’s a broad age group—some younger people and people like myself,” says Wiley, 56. “We’re working together to achieve a goal to increase family wealth.”

Escarpeta agrees. He wants to give back to his community and family by teaching them that real estate can be one way to build and sustain wealth, without having to leave their neighborhood.

“What I don’t want to do is get to a point where I can’t afford to live in a place that I call home,” he says.

CREDITS: Jessica Flores  \ @jesssmflores  \  Curbed LA

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By Derek T.Dingle

The prognosticators were wrong. Forecasts from ADP and Moody’s Analytics early last week revealed that the job market was slowing due to a private payrolls report showing a gain of just 67,000 jobs for the month of November. According to Friday’s report from the US Department of Labor, however, the job market continues to be robust, citing a boost in nonfarm payrolls by 266,000. As such, the overall unemployment rate has declined to 3.5% — the lowest point since 1969.

As for the African American unemployment rate, it currently stands at 5.5%, close to the all-time low for the decade. But when compared to the 3.2% unemployment rate for whites, African American unemployment is still is at a rate that is 72% greater than that of whites.

Overall, employment figures show the biggest gain since January and that far exceed the predictions of another survey estimate of an increase of 180,000 jobs, according to Bloomberg. One question was answered, though: The jobs numbers have been significantly impacted by the fact that November represented the first full month that GM workers had returned to work after a 40-day strike, making up for the previous month’s decline by some 41,000.

“Job growth for most of 2019, while volatile, tells a consistent message. Although census hiring and ending of the auto strike affected this month’s figure,” tweeted Harin Contractor, former Economic Policy Advisor to the US Secretary of Labor during the Obama administration and current Program Manager for Silver Spring, Maryland-based business consulting firm Nexight Group L.L.C.

Contractor, who has provided monthly analysis of the state of black employment when he served as director of Workforce Policy at the Joint Center for Political and Economic Studies, shared that the drivers of job growth continue to be education and health services, a trend that has marked much of 2019. “Depending on what happened next month, job growth in 2019 is fairly consistent with previous years. We hope this will lead to greater wage growth in the near future,” he tweeted.

Civil rights advocates and researchers alike cite that although the African American employment rate is at a historic low, that figure does not accurately reflect the full picture related to African Americans’ economic status. As reported by Black Enterprise on Thursday, the Center for American Progress revealed African Americans — especially black women—must face an ongoing, systemic pattern of “outright discrimination” and “occupational segregation” in the labor market.

In reviewing the black employment situation throughout much of 2019, National Urban League President Marc Morial has told CNBC earlier this year “Let’s look at this in context, not look at one number and say, ‘OK, good. Let’s celebrate,” especially since the racial wealth gap continues to persist. For example, the latest US Census Bureau figures on black homeownership were 42.1% compared with 72.7% among whites. Morial and others have cautioned against looking at the unemployment rate and concluding that it reflects the overall economic and financial health of African Americans.

Moreover, the Joint Center has conducted studies on racial equality and the future of work in recent years. The organization has found that African Americans — especially in blue-collar positions — tend to be at a huge disadvantage due to increased automation of service-based industries. Its 2017 report on this trend revealed that 27% of all African American workers are concentrated in just 30 occupations at high risk to automation. including positions in brick-and-mortar retail, eateries and transportation. For example, compared to white workers, African Americans are more than one-and-a-half times more likely to be cashiers and combined food preparation and serving workers as well as over three times more likely to be security guards, bus drivers, taxi drivers and chauffeurs Historycznie rzecz biorąc, hazard jest prawie tak stary jak sama ludzkość. Pierwsze dowody na istnienie hazardu sięgają 3000 r. p.n.e., w postaci gier w kości. Jeśli skierujemy swój wzrok nieco bardziej w stronę teraźniejszości, to oczywiście hazard i kasyna online na http://topkasynoonline.com/ bardzo się zmienił i rozwinął. Możliwości hazardu są wielorakie, ale są silnie zdeterminowane przez przepisy prawne danego kraju. Jak rozwinął się hazard w Polsce i jak wygląda obecna sytuacja prawna?

The Joint Center reports that unique challenges that make African Americans “particularly vulnerable in labor market transitions include unemployment rates that are twice as high as whites, Implicit bias in hiring and evaluation, residential and educational segregation, transportation problems, lower rates of digital readiness and limitations in social networks.”

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Credits: Derek T. Dingle \ Black Enterprise

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By Anthony Kellum

Last month HUD published its annual FHA Actuarial Report. The report shows extremely strong financial performance — with reserves against losses of $62 billion and an economic net worth-capital ratio of 4.84% for the overall portfolio. The FHA’s capital ratio is the highest since 2007 and almost two and a half times the FHA’s statutory capital requirement.

This reflects the solid job the FHA is doing in meeting its dual statutory requirements to facilitate access to mortgage credit for first-time homebuyers, underserved and minority borrowers, while protecting taxpayers through prudential financial management.

During the 2008 financial crisis, when private capital all but disappeared from the mortgage market, the FHA continued insuring loans to qualified homebuyers, stabilizing the housing market.

Doing so stressed FHA insurance reserves. However, prudent program management — including significant premium hikes to balance the increased risk of loss from market uncertainty — allowed the FHA to ensure a steady flow of mortgage financing at the same time Fannie and Freddie fell into conservatorship and the Federal Reserve Banks and Treasury advanced trillions to save banks, AIG and others.

The economic rebound and related home appreciation have pushed FHA reserves to record levels — culminating in last week’s strong actuarial report. The FHA’s financial metrics — measured by historically low default and foreclosure rates and relatively high average FICO scores — are also very strong.

So where do we go next? The Community Home Lenders Association, anticipating a strong actuarial report, recently wrote a letter to FHA suggesting the proper course and responding to the administration’s recent housing finance plan.

The CHLA’s letter cited its support of FHA managerial improvements outlined in the plan, including more flexible pay scales for the FHA, modernizing IT, and better aligning servicer penalties for errors with their financial impact. The CHLA also expressed concern about certain loan types such as down payment assistance programs and PACE loans.

However, the CHLA letter forcefully pushed back against proposals in the plan to: (1) limit FHA loans to borrowers not served by conventional underwriting, (2) eliminate FHA loans for repeat borrowers and for conventional to FHA refinances and (3) reduce availability of cash-out refis.

The second obvious conclusion from the Actuarial Report is the FHA needs to continue the process it started in 2015 to terminate temporary premium increases put in place to shore up the FHA fund during the Great Recession. Reversal of the 2013 policy change to require mortgage insurance for the life of the loan should be the next step in this process.

Current life of loan premiums significantly overcharge FHA borrowers — largely low- and moderate-, minority and first-time homebuyers — who, by the time they reach the 78% LTV threshold, have already paid around 10% of the loan amount in premiums. The life of loan policy also accelerates Ginnie Mae prepayment speeds — a source of concern to that agency, reducing the prices of Ginnie securities that ensure borrowers receive affordable interest rates.

Some argue we can’t afford to lose the revenue from eliminating life of loan insurance. We heard the same type of argument four years ago when many groups argued against a premium cut; yet the FHA insurance fund continues to get stronger.

Based on observations of the borrowers Kellum Mortgage and other CHLA members serve, we believe the life of loan policy could actually reduce FHA revenue, because borrowers refinance into conventional mortgages as soon as they can, knowing they pay 30 years of premiums under the FHA. This causes the FHA to lose premiums from these borrowers.

Influential organizations spanning the political spectrum — including the National Association of Realtors, the National Association of Real Estate Brokers, the National Association of Hispanic Real Estate Professionals, the National Community Reinvestment Coalition, the National Housing Conference and the National Consumer Law Center — support the effort to end life of loan premiums. Now, with the Actuarial Report in hand, it is time for the FHA to act to end this policy.

Given the critical access to credit role the FHA plays today, and in light of its strong financial performance, now is not the time to “reduce the FHA’s footprint.” My firm deals with working-class families all the time, and I can attest that FHA underwriting standards are still prudent when applied properly and the FHA is sorely needed in the marketplace.

The FHA’s core mission is to provide affordable mortgage credit to borrowers not served by traditional underwriting — not to deny families affordable mortgage credit to entice the private market to do so. As the FHA program has proven highly profitable, clearly something other than profits is keeping the private market from offering alternatives to the FHA program. We should figure that out before limiting hard-working families’ ability to own homes.

The FHA has played a critical role in providing access to credit without taxpayer risk. Let’s keep it strong and effective.

Credits: Anthony Kellum \ National Mortgage News

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By Elizabeth Weintraub

If you’re like most first-time home buyers, you’ve probably listened to friends’, family’s and coworkers’ advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are eight good reasons why you should buy a home.

#1. Pride of Ownership

#2. Appreciation

The post 8 Reasons to Buy a Home appeared first on National Association of Real Estate Brokers.

By Luis Ferré-Sadurní

An undercover investigation on Long Island found that real estate agents treated people of color unequally 40 percent of the time.

One Long Island real estate agent told a black man that houses in a predominantly white neighborhood were too expensive for his budget. But the same agent showed houses in the same neighborhood to a white man with the same amount of money to spend.

Another real estate agent warned a white home buyer about gang violence in a mostly minority neighborhood, but she appeared to steer a black buyer with a comparable budget toward homes in that neighborhood.

All told, real estate agents treated people of color unequally 40 percent of the time compared with white people when they searched for homes on Long Island, one of the most racially segregated suburbs in the United States.

Those were among the findings of a three-year undercover investigation published this past weekend by Newsday, a Long Island newspaper, which exposed widespread evidence that discriminatory, and potentially illegal, home-selling practices are helping to keep the area’s neighborhoods segregated.

Newsday did the sort of undercover testing that government agencies and nonprofit groups are supposed to do to enforce fair-housing regulations meant to prevent disparate treatment based on racial and other factors.

The newspaper recruited a diverse group of people, some of them actors, to pose as first-time home buyers, outfitting them with hidden cameras to capture their interactions with real estate agents. It is legal in New York to record a conversation or phone call if the person making the recording is a party to the conversation.

Over 16 months, the would-be home buyers conducted about 100 tests. They got help from housing experts and recorded 240 hours of video that the newspaper turned into a 13-article series and a 40-minute documentary. More than 50 reporters, producers, editors and other Newsday employees worked on the project.

The newspaper contacted 93 real estate agents at some of the area’s biggest firms. Two testers — of different races, but of the same gender and about the same age, with similar income and housing preferences — would independently approach the same agent to test whether they were treated differently based on their race.

The results were startling, even though Long Island is a part of New York where redlining, zoning regulations and other forces have long perpetuated racial divides.

“Black testers experienced disparate treatment 49 percent of the time — compared with 39 percent for Hispanic and 19 percent for Asian testers,” Newsday reported.

In some cases, agents did not show listings to black testers if they had not been preapproved for a mortgage. The same agents would accommodate white testers who did not meet that condition.

The federal fair-housing law, passed in 1968 as part of the Civil Rights Act, prohibits discrimination in housing based on race, religion and other factors.

The Department of Housing and Urban Development is responsible for enforcing the law, mostly through its regional offices and through grants to nonprofits to investigate complaints, conduct tests and educate buyers and renters.

In New York, state agencies also enforce the law, with the state’s 133,000 licensed real estate brokers and agents responsible for abiding by fair-housing standards.

Credits: Luis Ferré-Sadurní / The New York Times

The post What Happens When Black People Search for Suburban Homes appeared first on National Association of Real Estate Brokers.

By Mike Grundon

Owning a home is more than just hype; it’s the gateway to long-term and short-term financial success. Long-term, you’ll build an equity nest egg and short-term, you’ll be able to enjoy potential tax breaks and pay yourself instead of a landlord. A home purchase is an investment you’ll be glad you made!

Owning a home can make a huge difference for your financial future, especially for a first-time homebuyer. While buying a home can be a transformative experience for you personally, homeownership can help you financially as well. Homeownership can lead to building your personal wealth due to home equity, or fair market value, which will likely increase over time based on both the market and any renovations you make to your home.

San Diego is one of the top ten cities in the country that millennials are moving to. It is a particularly great place to buy a home because of its warm weather climate, proximity to the ocean and large, thriving industries, including a strong biotech presence and several large universities. Couple that with a bevy of fun and eclectic neighborhoods with wonderful restaurant and activity options, and it’s easy to see why you would choose to purchase a home in San Diego.

Renting in San Diego, on the other hand, can be expensive, and there are few options available. There is a lower vacancy rate in San Diego apartments than the national average and rents are rising faster than wages. This combination creates a difficult market for renters because the high demand and limited supply of rentals available drive up costs. If you can afford to buy a home, turning the cash that you would be spending on rent into payments on a mortgage can make a major difference in your long-term financial stability.

There are many reasons owning a home is important, and most of them stem from the fact that a home is an asset and paying a mortgage increases your equity in that asset, which is better than paying rent. A potential increase in your credit score, tax benefits and anticipated growth in the housing market are additional benefits to having a mortgage.

Having a mortgage can help improve your credit score because a home loan adds diversity to your credit profile. Even though a mortgage is a debt, it is “good” debt, because it is tied to an asset (the house). The largest portion of your credit score is determined by your payment history, and making payments on a long-term loan like a mortgage positively contributes to your payment history. As long as you make your payments on time, your mortgage can improve your credit score by increasing your reputation as a responsible borrower.

Owning a home that you can afford carries tax benefits, too. The IRS allows you to deduct the interest on your mortgage from your income taxes, as well as some closing costs and annual property taxes. Tax incentives like these help homeowners build wealth.

The house that you buy is an asset that can go up in value over time. San Diego has long been an attractive real estate market because of geographical advantages like good weather, scenic beaches and its status as a port city. Because it features the second largest millennial population per capita in the United States’ major cities, San Diego is poised to continue to grow. San Diego’s strong business presence, young population and desirable location have strongly factored into San Diego’s home values, which continue to be on the rise.

Buying a house requires planning, including finding out how much house you can afford, what type of loans are available and what the fees are. Mission Fed’s first-time homebuyer infographic can shed some light on what you need to do to purchase a home. Our handy Home Loan Calculator can help you figure out what you can afford by calculating monthly payments based on loan amounts, interest rates and points. You can use our Down Payment Calculator to estimate how much you should put down on your loan upfront or to calculate the amount of interest you can expect to pay over the life of your loan based on your down payment.

Homeownership is a journey that requires a lot of information and support, and Mission Fed is happy to provide both. Once you feel ready to apply for a mortgage, you can use our fast and easy online application to start the process of getting a Mortgage Loan. And once you click “send,” you’ll be minutes away from beginning the exciting transition from home renter to homeowner!

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Credits: Mike Grundon | Mission Federal Credit Union

The post Why Owning a Home Is Important appeared first on National Association of Real Estate Brokers.

By Keeanga-Yamahtta Taylor

The real estate market is so structured by race that black families will never come out ahead.

In January 1973, George Romney, Nixon’s enigmatic Secretary of Housing and Urban Development, administered an open-ended moratorium on its 1968 initiatives to open up single-family homeownership to low-income borrowers by providing government-backed mortgages. The experiment to make homeownership accessible to everyone ended abruptly with massive foreclosures and abandoned houses, but the questions ignited by these policies persisted. Some analysts insisted that the failure of HUD’s homeownership programs was proof positive that poor people were ill equipped for the responsibilities of homeownership. And they insisted that it more specifically implicated low-income African Americans as “incapable” homeowners. Others pointed to HUD’s obvious mismanagement of these programs as the real culprit in their demise, and, importantly, how the programs gave an industry already known for its racial bias new opportunities to exploit low-income African-Americans. But the lessons from HUD’s experiment were muddled by other economic sensibilities, including the commitment to private property and the centrality of homeownership to the American economy.

African Americans experience homeownership in ways that rarely produce the financial benefits typically enjoyed by middle-class white Americans.

Today, homeownership, even for low-income and poor people, is reflexively advised as a way to emerge from poverty, develop assets, and build wealth more generally. The historic levels of wealth inequality that continue to distinguish African Americans from whites are powerful reminders of how the exclusion of Blacks from this asset has generationally impaired Black families in comparison with their white peers. Owning a home as a way to build wealth is touted as an advantage over public or government-sponsored housing. It grounds the assumption that it is better to own than rent. And the greatest assumption of all is that homeownership is the superior way to live in the United States. This, of course, is tied to another indelible truth that homeownership is a central cog in the U.S. economy. Its pivotal role as an economic barometer and motor means that there are endless attempts to make it more accessible to ever-wider groups of people. While these are certainly statements of fact, they should not be confused as statements on the advisability of suturing economic well-being to a privately owned asset in a society where the value of that asset will be weighed by the race or ethnicity of whoever possesses it.

The assumption that a mere reversal of exclusion to inclusion would upend decades of institutional discrimination underestimated the investments in the economy organized around race and property. The concept of race and especially racial inferiority helped to establish the “economic floor” in the housing market. One’s proximity to African Americans individually, as well as to their communities, helped to determine the value of one’s property. This revealed another reality. Markets, as in the means by which the exchange of commodities is facilitated, do not exist in vacuums, nor do abstract notions of “supply and demand” dictate their function. Markets are conceived and constituted by desire, imagination, and social aspirations, among other malleable factors. This does not mean that markets are not real, but that they are not shaped by need alone. They are shaped by political, social, economic, and in the case of housing, racial concerns. And in the United States, these market conditions were shaped and stoked by economic actors that stood to gain by curtailing access to one portion of the market while then flooding another with credit, capital, and indiscriminate access to distressed and substandard homes.

HUD’s crisis in its homeownership programs in the 1970s reveal deeper and more systemic problems with the pursuit of homeownership as a way to improve the quality of one’s life. It is undeniable that homeownership in the United States has been “one of the important ways in which Americans have traditionally acquired financial capital” and that the “tax advantages, the accumulation of equity, and the increased value of real estate property enable homeowners to build economic assets. . . . These assets can be used to educate one’s children, to take advantage of business opportunities, to meet financial emergencies, and to provide for retirement.” Investment in homeownership, and its role in the process of the personal accumulation of capital, has been fundamental to the good life in the United States.

Markets are not shaped by need alone. They are shaped by political, social, economic, and in the case of housing, racial concerns.

The benefits of owning a home, however, have been experienced unevenly. The diminished access of African Americans to homeownership has been identified as a significant “consequence” of Black inequality. A national report on housing said as much: “The majority of nonwhite families are deprived of [these] advantage[s].” The disparity is clear when 70 percent of whites own a home, compared with 43 percent of African Americans. Lucky Jet – This online game is rapidly gaining popularity. You can read the review by clicking here . Lucky Jet has become a hit in several major casinos. Every day more and more players are discovering this game all over the world. Why are more and more players choosing Lucky Jet? Because the game is exciting, playable and the probability of winning is high. But the source of inequality is not just in the difference between the numbers of African Americans and whites who own homes. Even when African Americans do own their own homes, they experience the supposed benefits differently in comparison with white homeowners.

The conflation of race and risk to property value has been fully absorbed into the popular culture and real estate acumen of the United States. Enduring racist assumptions about Black hygiene and moral fitness overlapped with the obsession of white property owners in protecting their investments. Their defense of private property, including the cultural cues that came along with it, inspired the maniacal reaction to the possibility of Black neighbors. When NAREB established career-ending penalties for violating the organization’s commitment to racial segregation as early as 1924, the symbiosis of racial prerogative and value and its diffusion through the real estate market was legitimized and then replicated. The implications of this practice were hardly abstract; the property of Blacks and the communities their property was clustered in assumed a permanently subordinate position. As a result, to this present moment, homes owned by African Americans are worth less than homes owned by white people. Black-majority neighborhoods are still viewed less favorably than white-majority neighborhoods. Indeed, the distance from Black communities continues to factor into the superior value of the white neighborhood. This market fact segregates African Americans into deteriorating urban neighborhoods while simultaneously denying those communities access to resources that could be used toward development created an economic disadvantage for Black people that has been impossible to overcome.

The assumed threat of property damage and devaluation turned into reality on account of the distressed conditions of Black neighborhoods caused by decades of policy neglect, real estate exploitation, job erosion, and the outflux of industry and tax dollars. Residential segregation and lower incomes have meant that African Americans rely disproportionately on older used housing. As a consequence, their homes are not always appreciating assets. Even when values rise, their properties do not appreciate at the same pace as those of white families in exclusive white neighborhoods. Higher rates of unemployment, underemployment, and poverty among African Americans curtailed access to the housing market while simultaneously increasing their vulnerability to losing their homes through either eviction or foreclosure. Thus, African Americans experience homeownership in ways that rarely produce the financial benefits typically enjoyed by middle-class white Americans.

Discriminatory differentials were embedded in the U.S. housing market based on a combination of historical and continuing practices within the real estate, housing, and banking industries—abetted by the failure of the federal government, in any historical period, to enact rigorous regulatory compliance with civil rights laws. The dictates of the market have been impossible to surmount when housing is a commodity and thus malleable to the social desires and expectations of a public molded by racial consciousness. This reality is even more pronounced when the industries connected to housing have consistently made race a factor in market imperatives. Racial difference and antipathy are not unintended consequences of the market; they helped to constitute it.

Seventy percent of whites own a home, compared with 43 percent of African Americans. But the source of inequality is not just in the difference between the numbers.

Under these conditions, how could saddling poor and working-class African Americans with thousands of dollars of debt in the form of mortgages while they are still confined to the old and used portion of the housing market realistically be seen as a means of getting out of poverty? Not only did these houses not accrue in value, but they eventually, and in some cases very quickly, became a burden of debt that extracted rather than increased value from their owners. Even when the terms were created to make homeownership possible for poor and working-class Black people, this did not change the fact that those homes and the neighborhoods Black people resided in were valued differently. These differentials in value are inherent in a housing market fully actualized by racial discrimination.

The quality of life in U.S. society depends on the personal accumulation of wealth, and homeownership is the single largest investment that most families make to accrue this wealth. But when the housing market is fully formed by racial discrimination, there is deep, abiding inequality. There has not been an instance in the last 100 years when the housing market has operated fairly, without racial discrimination. From racial zoning to restricted covenants to LICs to FHA-backed mortgages to the subprime mortgage loan, the U.S. housing industry has sought to exploit and financially benefit from the public perceptions of racial difference. This has meant that even when no discernable discrimination is detected, the fact that Black communities and neighborhoods are perceived as inferior means that African Americans must rely on an inherently devalued “asset” for maintenance of their quality of life. This has created a permanent disadvantage. And when homeownership is promoted as a key to economic freedom and advancement, this economic inequality is reinforced, legitimized, and ultimately accepted.

The regular promotion of homeownership as a means to overcome poverty or as a method of building wealth in our society has been built on a mistaken assumption that all people enter the housing market on an equal basis or that the housing market itself is a neutral arbiter of value. The promotion of homeownership by the state is not only an acceptance of these market dynamics; it is also an abdication of responsibility for the equitable provision of resources that attend to the racial deficit created by the inequality embedded in homeownership. This may seem like a political impossibility in an ongoing atmosphere where public services and institutions are undermined, but it is no more impossible than the magical belief that homeownership will ever be a cornerstone of political, social, and economic freedom for African Americans.

Residential segregation and lower incomes have meant that African Americans rely disproportionately on older, used housing—often a burden of debt that extracted rather than increased value from their owners.

After all, even if there had been no nefarious acts, such as preying upon those desperate for shelter, the racial infrastructure of the housing market still placed African Americans at a disadvantage. These disadvantages continue to play themselves out in the contemporary moment, as Black and white wealth disparities remain entrenched because of their deep roots in a systemically racist and unequal housing market. Even if there is no scandal or controversy, white homes are consistently valued more than Black homes. White neighborhoods are seen as desirable destinations in ways that African American communities are almost never viewed. The historic disinvestment in and physical scarring of Black communities as a result continue to provide the pretexts necessary to finance Black homes differently, including charging higher rates of interest and more fees for lending in those communities. The involvement of public institutions in these private practices that are contingent on racial practices is a recipe for continued inequality, compromised inclusion, and unfair outcomes.

For more than fifty years now, the private sector has been viewed as most capable of ending the persisting urban housing crises. And yet those crises have become even starker over time, creating even greater degrees of housing precariousness. This is especially true in the realm of homeownership. The acceleration of subprime lending in the atmosphere of deregulation in the late 1990s and the early 2000s resulted in unprecedented home losses for African Americans. The practice of subprime lending was contingent on racial practices and assumptions across the housing industry and among the general public. The cascade of foreclosures and mortgage defaults further eroded the value of properties in Black communities, once again, hollowing out the notion of homes as assets for African Americans. The net loss of more than 240,000 homes for African Americans has created the pretext for mortgage lenders to, once again, engage in exclusionary practices that marginalize potential Black homeowners. But this is only one aspect of the crisis. The recurring perception of “risky” Black buyers has opened pathways for the reemergence of naked, predatory practices in the real estate market. From rent-to-own schemes to the reappearance of LICs in lieu of conventional mortgages, real estate continues to pilfer African Americans in search of their American dream in the housing market. It is not history repeating itself. It is the predictable outcome when the home is a commodity and it continues to be promoted as the fulfilment and meaning of citizenship.

Credits: Keeanga-Yamahtta Taylor \ Boston Review

The post Against Black Homeownership appeared first on National Association of Real Estate Brokers.

After a 3-year investigation with over 90 real estate agents tested, over 200 hours of meetings recorded, and over 5700 house listings analyzed, the Newsday investigation uncovered widespread evidence of unequal treatment by real estate agents on long island: 19% of the time against Asians, 39% against Hispanics and 49% against Blacks.

In one of the most concentrated investigations of discrimination by real estate agents in the half century since enactment of America’s landmark fair housing law, Newsday found evidence of widespread separate and unequal treatment of minority potential homebuyers and minority communities on Long Island.

The three-year probe strongly indicates that house hunting in one of the nation’s most segregated suburbs poses substantial risks of discrimination, with black buyers chancing disadvantages almost half the time they enlist brokers.

Additionally, the investigation reveals that Long Island’s dominant residential brokering firms help solidify racial separations. They frequently directed white customers toward areas with the highest white representations and minority buyers to more integrated neighborhoods.

They also avoided business in communities with overwhelmingly minority populations.

The findings are the product of a paired-testing effort comparable on a local scale to once-a-decade testing performed by the federal government in measuring the extent of racial discrimination in housing nationwide.

Read Full Report

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