Declining Market Policies Have Disparate Impact on Minorities, Lower Income Neighborhoods, Say Multicultural Real Estate Professionals

Business Wire (04/01/08)
A survey of 1,135 realtors, mortgage lenders and other minority real estate professionals by the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America and the National Association of Real Estate Brokers indicates that 62 percent of those polled worry about the lending policies implemented in declining markets by the government-sponsored enterprises, lenders and mortgage insurers. The poll shows that 35 percent of respondents believe declining market policies hurt minority and low-income neighborhoods the most, and 27 percent say minority communities often are swiftly declared declining markets by lenders. The declining market guidelines force 69 percent of those polled to reject up to four customers for every transaction closed; and approximately 67 percent of customers are rejected because their mortgage balances exceed their homes' worth, according to 55 percent of respondents. Additionally, 48 percent believe a national foreclosure fund could provide useful loan modifications and workouts for distressed borrowers. According to outgoing NAHREP Chairman Felix DeHerrera, "In effect, the consequences of these policies is a near complete suspension of financing resources to communities that need it most."