Black brokers push national homeownership campaign
THOMAS BAILEY JR. | 3/28/2016, 9:57 a.m.
The Commercial Appeal
MEMPHIS, Tenn. (AP) – Tamika Walker was paying $800 a month to rent a Northaven house, and grew tired of it.
“Paying rent and just seeing [the money] disappear,” the 37-year-old IRS employee recalled. “I wasn’t going to have anything to call my own; I’m paying this `mortgage’ in rent. I decided I wanted to buy a house.”
After 10 years of discipline to clear up $25,000 in credit card and car-loan debts as well as a credit history that included bankruptcy, Tamika and her husband Clarence Walker bought a house.
They paid $129,900 in July 2014 for a new home in the Wolf River Bluffs subdivision near McLean and James Road.
For the same amount they had been paying in rent, Tamika said, “I can pay my mortgage and my utilities.”
Now, those monthly checks steadily build the Walkers’ ownership interest in the house as well as their long-term wealth.
“Rebuilding Black Wealth Through Homeownership” happened to be the name of a regional conference two weeks ago. Not by chance did a national association of Black real estate brokers choose Memphis for its Southeast conference.
The Great Recession’s foreclosures ravaged Memphis’s moderate- and low-income neighborhoods. Street after street of houses that had been owned by the families they sheltered turned into rental rows.
In Memphis, where the population is 63 percent Black, the financial crisis caused a diaspora of sorts, routing thousands of families from the mortgages that would have built family wealth.
“We lost thousands of homes in the recession. I mean tens of thousands, not thousands,” said Tim Bolding, executive director of the nonprofit United Housing. The agency, which works to increase homeownership, developed Wolf River Bluffs.
In 2007, about 20 percent of single-family homes in Memphis were rentals, Bolding said.
“Today, as much as 40 percent of houses in Memphis are rental” compared to 11 percent nationwide, he said.
Enter the National Association of Real Estate Brokers, a historically Black organization that was founded 69 years ago to promote equal access to housing. The organization has launched a five-year campaign to increase by 2 million the number of African Americans who own homes nationwide.
Part of the effort is an educational campaign to prepare renters for buying houses, and to reduce fear and uncertainty about the process. But the brokers association also is addressing barriers it sees at the other end, with lending.
Using the analytical LendingPatterns software of Compliance Technologies to probe the home mortgage data lenders are required to report, the brokers association has found that in Memphis:
• White applicants for home loans succeed in getting a mortgage at a rate 1.72 times more than Black applicants. Compliance Technologies labels it the “origination disparity index;”
• And Black applicants are denied a loan at a rate 2.56 times greater than Whites. The company calls it the “denial disparity index.”
In 2014, lenders received 8,646 home-loan applications from Whites in Memphis. Of those, 5,215 or 65.5 percent were successfully completed. But of the 7,000 loan applications received by Black Memphians, 2,526 or 38 percent were approved by lenders.