How Will Secretary Carson Engage Latino Homebuyers?

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

Many questions remain for Dr. Ben Carson, who last month was officially sworn in as our newest Secretary of the U.S. Department of Housing and Urban Development (HUD). Since his January 12 confirmation hearing, many are still wondering how Dr. Carson will fulfill HUD’s mission and carry out the critical task of providing affordable rental and homeownership opportunities—free from discrimination—for all Americans.

On March 28, Secretary Carson had an opportunity to discuss his housing policy priorities at the National Association of Hispanic Real Estate Professionals Conference. It was an important audience for Secretary Carson—the Association represents the largest group of Hispanic real estate professionals, whose primary mission is getting Latinos into homes. This is a critical constituency, because Latinos are expected to form more than 40 percent of new households in the next decade. By 2020, Latinos are expected to account for half of new homeowners. Yet today, only 46 percent of over 14 million Hispanic households own their home, well below the rate in 2006, before the housing crisis, when nearly half of over 12 million Hispanic households owned homes.

Continue reading

Life After HAMP: What Kind of Mortgage Relief Can Struggling Homeowners Expect in 2017?

Last week the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac announced the release of the Flex Modification, a foreclosure prevention program that follows on the heels of the expiring Home Affordable Modification Program (HAMP). HAMP, introduced in 2009, was designed to help homeowners who fell behind on their mortgage payments to get relief and avoid foreclosure. Leading up to the recession, many homeowners, particularly in communities of color, were targeted by predatory lenders who offered unsustainable mortgage products. HAMP allowed homeowners to get relief by providing them with a permanent adjustment to their monthly payment that would make their mortgage more affordable. Homeowners could access this adjustment by seeking guidance from a HUD-certified housing counseling agency, and completing an application to their mortgage servicer.

With HAMP set to expire on December 31, 2016, stakeholders in the housing industry have rolled out proposals for the post-HAMP loan modification program. The Mortgage Bankers Association has led the industry’s efforts and developed the One Mod proposal. This universal or one-size-fits-all loan modification approach aims to replace HAMP, which was based on an individualized assessment of a homeowner’s financial situation.

Continue reading

Let’s Focus on What Matters

By Janet Murguía, President and CEO, NCLR

Photo: Gage Skidmore

Photo: Gage Skidmore

It seems that we in the Latino community are not exempt from this election’s silly season. This week Buzzfeed published an article stating that the National Hispanic Leadership Agenda (NHLA)—a 25-year-old coalition of the 40 largest Latino organizations in the country—was “kicking out” Presente, an online organization that aims to amplify Latino voices, because of its attack this week on HUD Secretary Julián Castro. This is false. And apparently reporting from the future, kos of Daily Kos took this unsubstantiated and unconfirmed rumor as fact and even ascribed motivations to why it was done: “old school” Latino organizations objecting to criticism of a Latino leader.

Continue reading

Your Housing Rights Are on the Line

By Nancy Wilberg Ricks, Senior Policy Strategist, NCLR

This year all eyes are on anti-discrimination laws that impact your housing rights, as the U.S. Department of Housing and Urban Development (HUD) intends to release a much-needed and improved Affirmatively Furthering Fair Housing (AFFH) rule. Congress has already tried to stymie that rule, while the Supreme Court will scrutinize a legal theory called “disparate impact” that has long helped families battle housing discrimination.

This alphabet soup of players and policies could have a big impact on where you live, how much you pay for housing, and whether or not you are denied a chance to move into a neighborhood that’s good for your kids.

Legislative Obstacles
HUD’s release of a new AFFH rule has been a point of debate for more than 40 years. Now that HUD aims to finalize the rule, Congress is working hard to ensure that it is impossible to enforce. This rule would help in multiple ways:

  • It ensures that all people—regardless of race, ethnicity, family status, or disability—have a range of choices on where to live.
  • It gives jurisdictions the tools to identify barriers to fair housing and devise their own solutions to the unique problems they face.
  • It will advance opportunity in America by shaping investments in housing, transportation, environment, health, education, infrastructure, and economic development—all essential pathways to prosperity.

Some members of Congress are doing their best to undo years of progress made in rooting out housing discrimination. In the House last week, Representative Garrett (R–N.J.) offered an amendment to an appropriations bill that would stop the Department of Justice from enforcing the disparate impact rule, Representative Gosar (R–Ariz.) created an amendment that would stop HUD from finalizing the rule altogether, and Representative Stivers (R–Ohio) deliberately offered an amendment after midnight—when few members were present to speak against it—to prohibit the use of funds for fair housing programs. These are egregious and unfounded interventions taken by Congress to impede consumer protections.

Rumblings in the Courts
Adding fuel to the fire, the Supreme Court will decide this month whether the legal theory of “disparate impact” should be modified. Under disparate impact, a housing or lending policy or practice can be ruled discriminatory if it has a disproportionate, adverse effect on a given racial or ethnic group, even if it is unintentional. Disparate impact has laid effective precedent for decades to battle redlining, exclusionary zoning, and racial steering.

Decision-makers must maintain the strength of disparate impact’s parameters. While blatant housing discrimination is rare, studies indicate that prejudice endures. Minority home-seekers are still shown fewer available housing units, raising the costs of search and constraining their choices. With a ruling later this month, the Supreme Court threatens to dilute its strength, which could compromise years of consumer wins.

Segregation endures. It is no coincidence that the Civil Rights Act, passed in 1964, led to the creation of the Fair Housing Act, on which decades of legal precedent now hang. Today’s political climate compromises these advances and has made leaders blind to the impact of housing injustice. Invalidating fair housing rights amounts to much bigger problems for communities and society as a whole. In the wake of racial and economic unrest, now is not the time to roll back civil rights.

Dept. of Housing and Urban Development Makes Progress for Latino Families

Photo: HUD

HUD Secretary, Julian Castro. Photo: HUD

In his first congressional hearing since being confirmed last summer, Julián Castro, Secretary of Housing and Urban Development, testified before the House Financial Services Committee today on his agency’s progress and accomplishments.

This hearing couldn’t come at a more critical time, given that Latino families are still struggling to rebuild the wealth they lost during the Great Recession. Though an economic recovery is now under way, Latinos are not necessarily seeing improved outcomes in access to mortgage credit. Just last year, Hispanic home-buyers made up only 6 percent of the conventional mortgage market, despite comprising 17 percent of the population.

Fortunately, the U.S. Department of Housing and Urban Development (HUD) has the means to make mortgages more affordable for all creditworthy homebuyers through the Federal Housing Authority (FHA), which it oversees.

Thus far, Castro has helped FHA pivot toward a new focus on affordability and homeownership promotion. Just three months after taking office, he announced a new plan for HUD to expand mortgage credit access, which included measures affecting borrowers and lenders alike. In an effort to boost lenders’ willingness to make more loans, FHA will give lenders clarity on HUD policies and compliance issues. To the direct benefit of prospective homebuyers, FHA also lowered mortgage insurance premiums for all FHA loans by an average of $900 annually.

Castro also directed Ginnie Mae, a government corporation that creates mortgage-backed securities, to begin a new pilot program to give more mortgage lenders access to the secondary market and stimulate increased lending to borrowers.

While HUD has accomplished much during Castro’s tenure, the agency can do more to support homeownership and prevent foreclosure. Though the worst of the foreclosure crisis has subsided, far too many Latino families still risk losing their homes to foreclosure today. HUD should take concrete actions to keep struggling families in their homes and prevent needless foreclosure, including by continuing to require firms participating in its Distressed Asset Sales Program (DASP) to ensure that communities are stabilized.

HUD can also extend access to DASP properties to housing nonprofits, which are eager to help struggling homeowners stay in their homes. These properties have recently been prohibitively expensive for nonprofits, compared to for-profit investors. Under Secretary Castro, for the first time loans insured by FHA will be eligible for consumer relief that includes principal reduction as an option. This could also help prevent many foreclosures.

Finally, Congress should vote to restore full funding for the Homeowners Armed With Knowledge (HAWK) program, which would expand mortgage credit to homebuyers who complete pre- and post-purchase housing counseling. Housing counseling is a proven practice that works, providing families with certified professionals who can answer their crucial questions about mortgages and homeownership and help them avoid pitfalls.

As Secretary Castro continues implementing practices designed to boost homeownership and improve the housing sector, we urge him to consider the needs of struggling homeowners and prospective homebuyers from traditionally underserved communities. With half of all first-time home-buyers expected to be Latino by 2020, we cannot delay in ensuring that the American Dream remains accessible to all.