Even though housing is out of reach for more people, we in the real estate industry know that homeownership is a great way to build intergenerational wealth. Of course, affordability goes hand-in-hand with fair housing because fair housing (and financing) for all is the foundation of affordability for all.
When affordability meets fair housing
During a recent coaching session with an agent, the agent explained that Bob, a recent seller, sold the home he had lived in for 20 years, made a large profit on the sale, and bought a retirement home in Savannah, Georgia. You’ll have enough money left over to buy and build a nice retirement nest egg. This does not take into account his pension as a car factory worker. Congratulations, Bob. That’s the power of homeownership in America.
Today’s affordability reality
But what if Bob’s appraisal was modest? Or what if he wasn’t even able to buy that particular home because he was steered elsewhere or unfairly denied the loan he needed? What if the community was currently redlined, limiting the types of homebuyers who would bid on his home?
Sadly, as 2024 approaches, these assumptions are still a reality for some.
Interestingly, there are two common trends. Ministry of Justice We see redlining and other unfair housing (and loan) enforcement actions, all of which impact and cause affordable housing. They include:
- Lenders are aware of the risks of redlining and, in some cases, go years without taking corrective action.
- Evidence of discrimination in an employee or manager’s email, i.e., derogatory references to a particular region or outright hostility toward a protected group.
Examples of recent news
“CFPB fines BofA $12 million for failing to collect data on mortgage applicants.”
” Consumer Financial Protection Bureau (CFPB) imposed a $12 million fine american bank BofA announced Monday that it violated federal law by submitting false mortgage loan information over a period of nearly four years. According to the CFPB, hundreds of BofA loan officers failed to ask mortgage applicants demographic questions and falsely reported that they chose not to answer them. ” (Source: Housing Wire)
This is important because, in addition to violating federal law, the data collected is often the only way companies can be held accountable for unfair lending and housing practices. In other words, there is no face and no incident, no face and no incident. There’s no name, it’s just a game” becomes a demonic prophecy.
“KeyBank’s betrayal of Black and low-income homebuyers continues in 2022.”
“KeyBank provided 19.2% of its home purchase loans this year to low- and moderate-income (LMI) borrowers, down from 19.7% in 2021. Underestimating KeyBank’s long-term performance for ‘families looking to buy a home to live in: In 2018, more than 38% of such KeyBank loans went to LMI borrowers. Ta. Both data points look even uglier when compared to other top financial institutions, which were providing more than 30% of their 2022 purchase home loans to his LMI borrowers…” (Source: NCRC.org )
Fair housing and financing is for everyone, not just the wealthy. Let’s go back to Bob’s American Dream. Can you imagine what would have happened if he didn’t even have the ability to apply for a mortgage? Being a retiree from an auto factory, he could have been excluded based on this data.
“Citigroup fined $25.9 million for discrimination against Armenian-Americans, federal regulators say”
“The bureau’s investigation found that Citi employees were instructed to single out applications containing Armenian surnames, but were then instructed to hide the real reasons those applications were rejected. These employees were aware that they were violating banking laws that prohibit discrimination against nationality, and their decisions were not left on a recorded phone line or written down. “Citi stereotypes Armenians as being vulnerable to crime and fraud. In reality, Citi illegally fabricated documents to cover up discrimination,” CFPB Director Rohit Chopra said in a statement. Ta. ” (Source: ABC7.com)
Unfortunately, the meaning of someone’s name or the way they sound when they speak it is not a new consideration in inequitable housing, meaning there is still work to be done. Imagine if Bob’s credit application was summarily rejected simply because of his last name. How quickly he would have been thrown into the American nightmare.
In these three examples alone, clearly inequitable housing (and lending) still exists. But we are not powerless.
Therefore, we need more “Fair Housing DECODERS”. This is an acronym for all of us who are fair housing advocates.
As Fair Housing DECODERS, let’s consider how we can demonstrate the “R” in the acronym for “Reporter” regarding the recent real estate news mentioned above.
What do reporters do? They report!
More specifically, so that everyone can make informed decisions about which banks (and other companies) to use, we want to make sure everyone is aware of important and fair housing and lending news and Make sure you’re sharing with your network.
- Stay up to date with important data about fair housing and lending. We recommend signing up for free Google Alerts. You can set alerts for national and local news, with alerts like “Fair Housing.” [insert your town and/or state]”
- We actively provide important news about fair housing and lending to our network. However, having it reach the network now is a great start. Do you like sending mailers and newsletters? Well, why not add a Fair Housing Corner? Do you like videos on TikTok, Instagram, or YouTube? Videos work well too. Just add a monthly or quarterly vlog about fair housing. There are no limits to how you can keep your network informed.
- Improve your personal business transactions with a variety of fair housing and lending news alerts. Perhaps your preferred lender or other vendor list will undergo a purge at the end of the year. We have local authority to hold fair housing and lending violators accountable by asking them how they plan to defend fair housing and lending going forward (with timelines). benchmarks should be included). We also recommend against recommendations until a satisfactory advance plan with corresponding actions has been developed. If all companies are willing to take responsibility and continue to support fair housing, they should be given a second chance. When we know better, let’s do better.
As real estate agents, we have the opportunity to decipher and thwart housing inequities that can affect home prices for our neighbors as they rear their ugly heads in our daily operations. there is. Make the most of each opportunity.
Dr. Lee Davenport is a real estate coach/trainer and blogger who trains real estate agents and brokers on how to leverage technology to work smarter.