Congresswoman Waters Convenes National Banks About Lack of Opportunities for Minority Real Estate Professionals
Congresswoman Maxine Waters (CA-35) today convened a meeting with representatives from the four largest national banks, the Federal Housing Administration (FHA) and the Consolidated Board of Realtists (CBR) – an organization of African American real estate professionals – to examine the ability of minority real estate professionals to access the listings on foreclosed housing repossessed by the major banks and FHA.
Congresswoman Waters, who chairs the House Financial Services Subcommittee on Housing and Community Opportunity, has been actively engaged in efforts to ensure diversity and equal opportunity within the housing and financial services industries. She has introduced legislation to accomplish these goals and also convened numerous meetings with a range of participants from government, the private sector and non-profit organizations on this issue.
The meeting she hosted today included officials from Citigroup, Bank of America, Wells Fargo, JPMorgan Chase and FHA as well as more than 200 minority real estate professionals from the Los Angeles area. Bank and FHA representatives discussed how they select real estate brokers to market and sell the inventory of homes they reclaim after a borrower forecloses. Minority real estate professionals voiced concerns that they are being ignored and not provided the opportunity to market and sell foreclosed homes on behalf of the banks and FHA.
"As my discussions with minority real estate professionals in the Los Angeles area have made clear, both these large banks and the federal government often create barriers for the inclusion of qualified minority brokers and contractors," Congresswoman Waters said. "That is why I convened this meeting. It is essential to ensure that African Americans and Latinos have an opportunity to market and sell this huge inventory of foreclosed properties."
After a bank or FHA forecloses on a home, the home is either sold at auction or kept within the bank inventory. Banks and FHA then have to list properties with real estate professionals, as well as hire contractors to maintain and rehabilitate the properties.
The inventory of these real estate-owned (REO) properties has steadily grown over recent months, with banks finalizing foreclosure actions on a growing number of properties. In fact, RealtyTrac data indicates that banks took control of about 92,000 properties nationwide in April alone – constituting a nearly 45 percent increase from April 2009.
The challenges facing Congresswoman Waters' district are particularly acute. The 90-day delinquency rate in the 35th District of California was 16.55 percent in March of 2010, compared to a rate of 11.7 percent in California and 8.93 percent nationally, according to First American CoreLogic. And the REO rate, or the rate at which banks retake ownership of properties in foreclosure, was alarmingly 50 percent higher in Congresswoman Waters' district than in California overall and more than double the national rate.
While impacted by the foreclosure crisis, Americans have been affected simultaneously by increasing levels of unemployment, especially in minority communities, with African American and Latino unemployment 80 and 40 percent higher than white unemployment in April 2010 respectively. "The high level of unemployment is particularly distressing given the fact that minority communities were deliberately targeted by subprime lenders and are suffering the worst during the foreclosure crisis," said Congresswoman Waters, citing a recent analysis by UCLA finding that African Americans and Latinos combined lost an estimated $200 billion in assets over the last three years.
The Congresswoman has led congressional efforts for swift action on both the foreclosure and unemployment crises in her district and in minority communities across the country.
Two years ago, Congresswoman Waters authored legislation which created the Neighborhood Stabilization Program (NSP), which provides grants to states, local governments and nonprofits to fight foreclosures, home abandonment and blight and to restore neighborhoods. She was able to secure $6 billion for the program through two infusions of funds.
The CBR is an organization of African American real estate brokers, organized over 60 years ago when they were prevented from joining other real estate professional organizations. Its members sell properties in the Los Angeles area and also support education, training and development for minority real estate professionals entering the business while keeping members up-to-date with current real estate laws and regulations. Congresswoman Waters' work with CBR has enabled the organization's members to begin to access business opportunities under the NSP.
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