- 1. Housing Project PartnershipSupport for this theKirwan
Institutes FutureNovember 10, 2009of Fair Housing initiativeis
provided by the W.K.Detroit, MIKellogg Foundation Christy Rogers
The Kirwan Institute for the Study of Race and EthnicityThe Ohio
State University
2. Todays Agenda Purpose To engage you and learn more about the
nature of fair housing and fair credit challenges in Detroit To
incorporate your feedback into our broader blue print for the
future of fair housing Agenda Introduction: The Future of Fair
Housing & Fair Credit Small group brainstorming sessions Report
out and discussion 3. About Kirwan Multidisciplinary
appliedresearch institute Our mission is to expandopportunity for
all, especially for ourmost marginalized communities Founded in
2003 by john powell Opportunity Communities Program(1/3 of staff)
Opening pathways to opportunity for marginalized communities
through investments in people, places and supporting linkages
Opportunity mapping 3 4. available
online:http://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/publications/MI_Roundtable_Full_report.pdf
5. available
online:http://4909e99d35cada63e7f757471b7243be73e53e14.gripelements.com/publications/MI_Roundtable_Full_report.pdf
6. NGrowth of Vacant HousingLegend: W E in Detroit 1970-2000 S City
of Detroit % of Homes Vacant (% Vacant Housing Highways0-3 in 1970
and 2000) Counties3 - 10 10 - 15 Prepared by: Kirwan Institute
Source Data: U.S. Census Bureau 15 - 20 20 - 57.6 % Vacant % Vacant
1970 20008 08 16 Miles 7. Background: National Initiative on
SubprimeLending, Foreclosure and Race 8. What happened? -Lack of
loan information or understanding for consumers More than Justin
many of these communities Foreclosures and a Few Bad
Borrowers:-Communities wereUnderstanding the Credit historically
starved of credit Crisis Impact inCommunities of Color -Mortgage
securitization and the growth of the subprimeWhy Were Subprime
industry created incentives to Loans Concentrated in target new
markets with These Neighborhoods? mortgages -Targeting and
overconcentration of loans within these communities 9 9. From
Redlining toReverse Redlining 10. On the reverse side of thecoin,
J. Hernandez shows howareas in Sacramento with raciallyrestrictive
covenants in the pasthad the fewest loan denialstodaywhere prime
credit wassteered. 11. Background: National Initiative on
SubprimeLending, Foreclosure and RaceQuestion: Wheresthe panel on
theresultant worldwideeconomic meltdown? 12. Figure byChristopher
L.Peterson, Univ.of Utah LawSchool 13. Research takeaways Unequal
credit markets and segregated housing happenedtogether. Fair credit
and fair housing (broadly defined) will only happen together.
Global finance has evolved against and plays out in racially and
economically segregated neighborhoods. We need to know more about
banking and finance Fair housing and fair credit is an issue for
all of us, butattention needs to be targeted to
marginalizedcommunities. Otherwise, policies miss key opportunities
and challenges and miss those most affected by the crisis. 14.
Goals and Objectives Make progress in fair housing in three areas:
Improve access to fair financial options Affirmative community
revitalization Opportunity-based housing Ensure that programs and
policies responding to thesubprime crisis reach those most affected
Connect and engage diverse stakeholders for cross-cutting advocacy
15. The Future of Fair Credit and FairHousing: Key Questions How do
we best tell the story that we know? This isimportant because the
framing of the problem shapesits solution. How do we climb out of
the subprime lending andforeclosure fiasco without worsening the
alreadywidening opportunity gaps for communities of color? Home
ownership and mortgage lending Credit access, debt, leverage
Banking, savings 16. Initiative Design and Activities What?
Understand new/current challenges and necessary pathways to success
Provide a comprehensive view of changes needed Provide resources
and spark action among advocates How? Commissioned research from
national experts Input from advisory board Regional convenings
(obtaining local expertise and insight) Collaboration & policy
consensus building with national advocacy organizations 17.
Upcoming Activities Similar policy feedback from regional policy
convening: Seattle, WA Austin, TX New Orleans, LA Oakland, CA
Federal policy and advocacy consensus building meetingon fair
credit in Washington, DC (November 18) Final policy and advocacy
blueprint all papers &blueprint publicly available (website
& materialsavailable in early winter 2010) 18. Commissioned
workInitial findingsEmerging areas of concern 19. Commissioned
Research (Exs) Access to fair financial options (mortgage
andotherwise) Banks increasing reliance on feesimplications for
low-income customers and communities of color Discretionary pricing
of financial products Consumer credit for those coming out of
foreclosure Connect and engage diverse stakeholders What might an
advocacy strategy around fair credit and fair banking look like?
Whats the role for philanthropies? 20. Commissioned Research (Exs)
Affirmative community revitalization How has the subprime crisis
exacerbated fair housing and equitable community development
challenges? (Minneapolis, Cleveland, Boston, Sacramento) How has
the subprime and foreclosure crisis affected immigrants, especially
low-income and undocumented immigrant homeowners? How might the
homeowner/rental balance shift and affect rental markets? Ensure
that programs and policies responding to thesubprime crisis reach
those most affected How do we assess the current federal policy
response with respect to fair housing and civil rights goals?
(TARP, NSP2) What has the impact been on the AI/AN population
(data)? 21. Properties in Foreclosure in North Minneapolis (Mark
Ireland)No Home in Indian Country (Janeen Comenote)TARP Programs
Must Affirmatively Further (DeeDee Swesnick) 22. Properties in
foreclosure Study of North Minneapolis Subprime lenders did
disproportionate lending in the area Vast majority of foreclosed
mortgages issued throughmortgage broker (unregulated) CRL study:
pay on avg. $35,000 more over life of loan vs.sub-prime mortgage
through retail lender Prime lenders disproportionately absent
Foreclosed homeowners owed 4-5% more than the original principal
balance 23. Properties in foreclosure Under-reported,
disproportionate affect on rentalfamilies with school-age children
Rental properties accounted for 61% of foreclosures 40% of
foreclosed households had children in Minneapolis public schools;
60% were African American Yet most foreclosure policies directed to
homeowners Properties lose value and endanger neighbors Averaged
ten months to sell at average loss of $65K 83% of properties had
911 calls post-Sheriffs Sale, with an average of 8 calls per
property 24. No Home in Indian Country On-reservation populations
Federal government has legal and trust responsibility toprovide
housing for Native people NAHASDA Block grants to tribes and
triballydesignated housing entities Currently able to meet 5% of
need for housing Denial rate for conventional home purchase loans
of23% -- twice that of Whites 25. No Home in Indian Country
Off-reservation populations (majority of AI/AN population in US)
8-state study revealed the following barriers to housingfor urban
Native people: credit checks, low income, lackof affordable housing
stock, backgroundchecks, deposit/down payment requirements
Disproportionate number of Natives in homeless sheltercare, but
very few projects serving the Nativecommunity Little known about
barriers to fair credit 26. TARPs duty to affirmatively further
National Fair Housing Alliance paper Federal programs designed to
mitigate the effects ofthe financial crisis must meet their
obligations underthe Fair Housing Act TARP scope close to $ 3
Billion (OSIG Report) TARP funds relate to housing and urban
development TARP funds must be spent in a way to
affirmativelyfurther fair housing 27. Fair Housing Act requirements
Federal programs designed to mitigate the effects of the financial
crisis must meet their obligations under the Fair Housing Act All
executive departments and agencies shall administertheir programs
and activities relating to housing andurban development (including
any Federal agencyhaving regulatory or supervisory authority over
financialinstitutions) in a manner affirmatively to further
thepurposes of this subchapter and shall cooperate with
theSecretary [of HUD] to further such purposes. Sec.808(d) 28.
Example: Home AffordableModification Program (HAMP) Funded by $75
Billion in TARP funds Incentivizes mortgage loan modifications to
keepfamilies in their homes Civil rights & consumer groups had
to advocate for thecollection and reporting of data on race,
ethnicity &sex of applicants for HAMP loan modifications 29.
Overdraft feesRemittance market 30. Embarrassing fee facts Half of
overdraft fees are from small ATM/debitpurchases (the $40 cup of
coffee) Some banks include the overdraft allowance in theaccount
balance shown at the ATM In undercover visits, GAO officials often
couldnt getrequired disclosures detailing fees A handful of
consumers pay the lions share of fees (i.e.FDIC study showed that
customers with 5 or more NSFtransactions 14% of customers --
accounted for93.4% of total NSF fees) 31. Civil rights concerns
[Tree] People who overdraft repeatedly are more likely than the
general population to be lower income, single, non-white, and
renters Center for Responsible Lending. Quick Facts on Overdraft
Loans. April9, 2009.
http://www.responsiblelending.org/overdraft-loans/research-analysis/
[Forest] Incomes lag while housing, health care, and education
costs skyrocketmore people get in more debt, but the picture is
uneven. 32. Remittance market In 2004, 5% of transfers were done
via direct deposit intoaccounts at financial institutions (40
milliontransactions/year) Western Union and Money Gram charge
$12-50 fee pertransaction People are suspicious of bank pricing,
dont have needed ID, or know of hand-to-hand alternatives Bank of
America has offered free remittance service since 2005banks want
new customers If banks are going to get new customers via the
remittancemarket, how do we ensure that they subsequently offerthem
sustainable options? 33. Fair housing and fair lending Group A:
Barriers to / Best practices for access to fairfinancial options,
mortgage and otherwise Group B: Barriers to / Best practices for
affirmativecommunity revitalization Group C: Barriers to / Best
practices for opportunity-based housing 34. Save the date; March
11-13, 2010 35. Thank You!www.kirwaninstitute.org38