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Friday, April 21, 2006

Wealth Building Impeded Due to High Cost Lending

Wealth Building Impeded Due to High Cost Lending

Washington, DC- April 20, 2006 – The National Community Reinvestment Coalition (NCRC), The Opportunity Agenda and the Poverty & Race Research Action Council (PRRAC) will hold a press conference today at 12:30PM on their a joint study entitled: Homeownership and Wealth Building Impeded: Continuing Lending Disparities for Minorities and Emerging Obstacles for Middle-Income and Female Borrowers of all Races. The press conference will take place at the NCRC headquarters at 727 15th Street NW 8th Floor. The study reveals that home loan lending inequities transcend not only, racial and gender lines, but the ethnic make-up of neighborhoods as well.

“This report is the first to show the home lending cross-sections between race, gender and income and to specifically examine lending practices in immigrant neighborhoods,” says John Taylor, President and CEO of NCRC. “It clearly outlines that regardless of how much money you make, if you are part of the traditionally underserved, then odds are you are receiving a high cost loan. That makes it difficult to keep your home, manage your bills and to build inheritable wealth in this country.”

Based on the new 2004 Home Mortgage Disclosure Act (HMDA) data, NCRC found that minorities and immigrants receive strikingly high numbers of high cost – or subprime - loans despite their economic status. In addition, middle and upper income borrowers in white neighborhoods received just 8.3 percent of subprime home purchase loans, while the same income group in immigrant neighborhoods received over 13..6 percent of high cost loans. Markedly, women – regardless of ethnic or racial make-up - received over 32.1 percent of subprime loans made to all Americans even though females compose only 29 percent of the nation’s households. In contrast, women received only 24 percent of the prime home purchase loans.

"Homeownership is an important element of opportunity in America," said Brian D. Smedley, Research Director for The Opportunity Agenda. "This report shows that the security of homeownership remains out of reach for many because of differences in home lending markets across communities. These lending disparities compound the multiple barriers to opportunity that many groups face."

The abilities of a broad segment of the American population to build wealth through homeownership are impeded by the prevalence of high cost lending that drains homeowner equity. Indeed, building wealth through homeownership has been the American Dream and the path to opportunity for Americans for generations. Stakeholders need to come together to make sure that wealth-building opportunities are preserved by increasing equal access and fairness in the lending marketplace.

NCRC is a national non-profit membership organization that promotes economic justice and equal access to credit, capital and financial services to traditionally underserved communities. For more information on NCRC, visit us on line at www.ncrc.org or call 202-628-8866.

The Opportunity Agenda is a communications, research, and advocacy organization dedicated to building the national will to expand opportunity in America. For more information, go to www.opportunityagenda.org or call 212-334-5977.

The Poverty & Race Research Action Council (PRRAC) is a civil rights research and policy organization based in Washington, D.C. PRRAC’s primary mission is to help connect advocates with social scientists working on race and poverty issues, and to promote a research-based advocacy strategy on race and poverty issues. For more information, visit www.prrac.org or call 202-906-8023.

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