The Psychology Behind the Recovery

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Th e M Rep o RT | 63 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET LocaL edition weighted average delinquency rate of 2.27 percent, and a weighted average loan age of six months. The average loan size for the portfolio was $185,071. In addition, MIAC represented another seller offering a $24.96 million servicing portfolio, which contained 79.8 percent Ginnie Mae and 20.2 percent Fannie Mae loans. All loans included were fixed-rate and had an average interest rate of 4.5 percent, a de- linquency rate of 0.76 percent, and a loan age of two months. Most of the portfolio's concentration was in New York, and the average loan size was $190,504. That port- folio went up for bid February 7. equal Footing FHA key to Addressing Housing inequAlity, According to Hud secretAry. washington, D.c. // During a town hall meeting hosted by Zillow and the National Urban League, HUD Secretary Shaun Donovan said progress is being made in regards to inequality in the housing market, but discrimination and inequality persist. During the housing crisis years from 2005 to 2009, Latino Americans lost 66 percent of their wealth, and African-Americans lost 50 percent of their wealth, according to Donovan. These communities were hit harder by the crisis in part because more of their wealth was tied up in their homes, Donovan explained during the question and answer session. Since the crisis years, many predominately Hispanic communities have rebounded, but African-American communities have not, he said. A recent report from Zillow and the National Urban League detailed some of the homeowner- ship-related difficulties Hispanic and African-Americans face. While some of the blatant discrimination in the mortgage industry has declined, more subtle discrimination persists, Donovan explained. For example, Latino and African-American buyers tend to be shown fewer homes than white buyers, according to HUD research. Zillow chief economist Stan Humphries also pointed out that some of the inequality in homeownership stems from deeper socioeconomic issues, such as inequalities in education and incomes among Latinos and African-Americans "Part of this is a historic legacy," Donovan said in agreement. "Those are things we have to attack with a much broader set of initiatives." He added that for some children in low-income neighborhoods, "their single most important determinant of their life chances isn't their potential; it's their ZIP code." While these deeper issues must be addressed more broadly, Donovan said the Federal Housing Administration (FHA) has been "a lifeline" for minority home buyers, helping about half of African-American and Latino buyers gain access to credit. He warned that new policy should avoid restricting access to FHA. Because acquiring enough money for a down payment on a home is the most common barrier to homeownership, Donovan also stressed the importance of down payment assistance. For those looking to purchase a home, Donovan suggested speaking with a HUD-approved housing counselor, which can be found on HUD's website. He also mentioned the Back to Work program, which allows potential homebuyers to access FHA loans with just one year of work history provided they meet other criteria. The program is aimed at families who lost jobs during the economic downturn. "[For some children in low-income neighborhoods,] their single most important determinant of their life chances isn't their potential; it's their ZIp code." —shaun Donovan, Hud secretary

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