1. Housing Project Partnership
Support for this the
Kirwan Institute’s “Future November 10, 2009
of Fair Housing” initiative
is provided by the W.K.
Detroit, MI
Kellogg Foundation
Christy Rogers
The Kirwan Institute for the Study of Race and Ethnicity
The Ohio State University

2. Today’s Agenda
 Purpose
 To engage you and learn more about the nature of fair
housing and fair credit challenges in Detroit
 To incorporate your feedback into our broader “blue
print” for the future of fair housing
 Agenda
 Introduction: The “Future of Fair Housing & Fair Credit”
 Small group brainstorming sessions
 Report out and discussion

3. About Kirwan
 Multidisciplinary applied
research institute
 Our mission is to expand
opportunity for all, especially for our
most marginalized communities
 Founded in 2003 by john powell
 Opportunity Communities Program
(1/3 of staff)
 Opening pathways to opportunity for
marginalized communities through
investments in people, places and
supporting linkages
 Opportunity mapping
3

4. available online:
http://4909e99d35cada63e7f75
7471b7243be73e53e14.gripele
ments.com/publications/MI_Ro
undtable_Full_report.pdf

5. available online:
http://4909e99d35cada63e7f757
471b7243be73e53e14.gripeleme
nts.com/publications/MI_Roundta
ble_Full_report.pdf

7. N
Growth of Vacant Housing Legend: W E
in Detroit 1970-2000 S
City of Detroit % of Homes Vacant
(% Vacant Housing Highways 0-3
in 1970 and 2000) Counties 3 - 10
10 - 15
Prepared by: Kirwan Institute
Source Data: U.S. Census Bureau 15 - 20
20 - 57.6
% Vacant % Vacant
1970 2000
8 0 8 16 Miles

8. Background: National Initiative on Subprime
Lending, Foreclosure and Race

9. What happened?
-Lack of loan information or
understanding for consumers
More than Just in many of these communities
Foreclosures and a Few
Bad Borrowers: -Communities were
Understanding the Credit historically starved of credit
Crisis Impact in
Communities of Color -Mortgage securitization and
the growth of the subprime
Why Were Subprime industry created incentives to
Loans Concentrated in target new markets with
These Neighborhoods? mortgages
-Targeting and
overconcentration of loans
within these communities
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10. From Redlining to
Reverse Redlining

12. On the reverse side of the
coin, J. Hernandez shows how
areas in Sacramento with racially
restrictive covenants in the past
had the fewest loan denials
today…where “prime” credit was
steered.

14. Background: National Initiative on Subprime
Lending, Foreclosure and Race
Question: Where’s
the panel on the
resultant worldwide
economic meltdown?

15. Figure by
Christopher L.
Peterson, Univ.
of Utah Law
School

16. Research takeaways
 Unequal credit markets and segregated housing happened
together.
 Fair credit and fair housing (broadly defined) will only
happen together.
 Global finance has evolved against – and plays out in –
racially and economically segregated neighborhoods.
 We need to know more about banking and finance
 Fair housing and fair credit is an issue for all of us, but
attention needs to be targeted to marginalized
communities.
 Otherwise, policies miss key opportunities and challenges
and miss those most affected by the crisis.

17. Goals and Objectives
 Make progress in fair housing in three areas:
 Improve access to fair financial options
 Affirmative community revitalization
 Opportunity-based housing
 Ensure that programs and policies responding to the
subprime crisis reach those most affected
 Connect and engage diverse stakeholders for cross-
cutting advocacy

18. The Future of Fair Credit and Fair
Housing: Key Questions
 How do we best tell the story that we know? This is
important because the framing of the problem shapes
its solution.
 How do we climb out of the subprime lending and
foreclosure fiasco without worsening the already
widening opportunity gaps for communities of color?
 Home ownership and mortgage lending
 Credit access, debt, leverage
 Banking, savings

19. Initiative Design and Activities
 What?
 Understand new/current challenges and necessary pathways
to success
 Provide a comprehensive view of changes needed
 Provide resources and spark action among advocates
 How?
 Commissioned research from national experts
 Input from advisory board
 Regional convenings (obtaining local expertise and insight)
 Collaboration & policy consensus building with national
advocacy organizations

20. Upcoming Activities
 Similar policy feedback from regional policy convening:
 Seattle, WA
 Austin, TX
 New Orleans, LA
 Oakland, CA
 Federal policy and advocacy consensus building meeting
on fair credit in Washington, DC (November 18)
 Final policy and advocacy “blueprint” – all papers &
blueprint publicly available (website & materials
available in early winter 2010)

21. Commissioned work
Initial findings
Emerging areas of concern

22. Commissioned Research (Ex’s)
 Access to fair financial options (mortgage and
otherwise)
 Banks’ increasing reliance on fees…implications for low-
income customers and communities of color
 Discretionary pricing of financial products
 Consumer credit for those coming out of foreclosure
 Connect and engage diverse stakeholders
 What might an advocacy strategy around fair credit and
fair banking look like?
 What’s the role for philanthropies?

23. Commissioned Research (Ex’s)
 Affirmative community revitalization
 How has the subprime crisis exacerbated fair housing and
equitable community development challenges?
(Minneapolis, Cleveland, Boston, Sacramento)
 How has the subprime and foreclosure crisis affected
immigrants, especially low-income and undocumented
immigrant homeowners?
 How might the homeowner/rental balance shift and affect
rental markets?
 Ensure that programs and policies responding to the
subprime crisis reach those most affected
 How do we assess the current federal policy response with
respect to fair housing and civil rights goals? (TARP, NSP2)
 What has the impact been on the AI/AN population (data)?

24. Properties in Foreclosure in North Minneapolis (Mark Ireland)
No Home in Indian Country (Janeen Comenote)
TARP Programs Must Affirmatively Further (DeeDee Swesnick)

25. Properties in foreclosure
 Study of North Minneapolis
 Subprime lenders did disproportionate lending in the
area
 Vast majority of foreclosed mortgages issued through
mortgage broker (unregulated)
 CRL study: pay on avg. $35,000 more over life of loan vs.
sub-prime mortgage through retail lender
 Prime lenders disproportionately absent
 Foreclosed homeowners owed 4-5% more than the
original principal balance

26. Properties in foreclosure
 Under-reported, disproportionate affect on rental
families with school-age children
 Rental properties accounted for 61% of foreclosures
 40% of foreclosed households had children in
Minneapolis public schools; 60% were African American
 Yet most foreclosure policies directed to homeowners
 Properties lose value and endanger neighbors
 Averaged ten months to sell at average loss of $65K
 83% of properties had 911 calls post-Sheriff’s Sale, with
an average of 8 calls per property

27. No Home in Indian Country
 On-reservation populations
 Federal government has legal and trust responsibility to
provide housing for Native people
 NAHASDA – Block grants to tribes and tribally
designated housing entities
 Currently able to meet 5% of need for housing
 Denial rate for conventional home purchase loans of
23% -- twice that of Whites

28. No Home in Indian Country
 Off-reservation populations (majority of AI/AN
population in US)
 8-state study revealed the following barriers to housing
for urban Native people: credit checks, low income, lack
of affordable housing stock, background
checks, deposit/down payment requirements
 Disproportionate number of Natives in homeless shelter
care, but very few projects serving the Native
community
 Little known about barriers to fair credit

29. TARP’s duty to affirmatively further
 National Fair Housing Alliance paper
 Federal programs designed to mitigate the effects of
the financial crisis must meet their obligations under
the Fair Housing Act
 TARP scope close to $ 3 Billion (OSIG Report)
 TARP funds relate to housing and urban development
 TARP funds must be spent in a way to affirmatively
further fair housing

30. Fair Housing Act requirements
 Federal programs designed to mitigate the effects of
the financial crisis must meet their obligations under
the Fair Housing Act
 “All executive departments and agencies shall administer
their programs and activities relating to housing and
urban development (including any Federal agency
having regulatory or supervisory authority over financial
institutions) in a manner affirmatively to further the
purposes of this subchapter and shall cooperate with the
Secretary [of HUD] to further such purposes.” – Sec.
808(d)

31. Example: Home Affordable
Modification Program (HAMP)
 Funded by $75 Billion in TARP funds
 Incentivizes mortgage loan modifications to keep
families in their homes
 Civil rights & consumer groups had to advocate for the
collection and reporting of data on race, ethnicity &
sex of applicants for HAMP loan modifications

32. Overdraft fees
Remittance market

33. Embarrassing fee facts
 Half of overdraft fees are from small ATM/debit
purchases (the “$40 cup of coffee”)
 Some banks include the overdraft allowance in the
account balance shown at the ATM
 In undercover visits, GAO officials often couldn’t get
required disclosures detailing fees
 A handful of consumers pay the lion’s share of fees (i.e.
FDIC study showed that customers with 5 or more NSF
transactions – 14% of customers -- accounted for
93.4% of total NSF fees)

34. Civil rights concerns
 [Tree] People who overdraft repeatedly are more likely
than the general population to be lower
income, single, non-white, and renters
 Center for Responsible Lending. “Quick Facts on Overdraft Loans.” April
9, 2009. http://www.responsiblelending.org/overdraft-loans/research-
analysis/
 [Forest] Incomes lag while housing, health care, and
education costs skyrocket…more people get in more
debt, but the picture is uneven.

35. Remittance market
 In 2004, 5% of transfers were done via direct deposit into
accounts at financial institutions (40 million
transactions/year)
 Western Union and Money Gram charge $12-50 fee per
transaction
 People are suspicious of bank pricing, don’t have needed
ID, or know of hand-to-hand alternatives
 Bank of America has offered free remittance service since
2005…banks want new customers
 If banks are going to get new customers via the remittance
market, how do we ensure that they subsequently offer
them sustainable options?

36. Fair housing and fair lending
 Group A: Barriers to / Best practices for access to fair
financial options, mortgage and otherwise
 Group B: Barriers to / Best practices for affirmative
community revitalization
 Group C: Barriers to / Best practices for opportunity-
based housing

37. Save the date; March 11-13, 2010

38. Thank You!
www.kirwaninstitute.org
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