Transcription:
Announcer (
Awesome. So thank you for introducing.
Kathryn Keeton (
All right. I think we're ready to roll, everyone. Good. We're seeing some really friendly faces who are gonna be here to listen into some wisdom on, a really important topic. I think we all care about this one a lot, and so, super excited. My name is Catherine Keaton. I'm the Senior Director of Client Engagement and Customer Success Operations at Sagent. We are really, like Sagent is thrilled to be sponsoring this track. and so we've already got a lot of our panelists up on stage because we're really ex we're running a couple minutes behind. But, allow me to introduce, our panelists today. And so we have, for our moderator, we have Shashank Shekhar, we have Mosae, Gatling, Lydia, Pope, and Paul Jolate, to talk about this, I'm gonna hand it off to you guys.
Shashank Shekhar (
Okay, so we are going to talk about something. Am I getting an echo here? Better now? Okay, cool This is turned off, so I think we should be fine now. Yeah, we're good. Cool, So before we go to the panelist here, really I wanted to set the stage by talking about few kind of data point and the statistics around diversity and inclusion so that we are aware of where we are and where we want to go, which is what we would, we want to talk to our panelists about. So, between 2020 and 2040, which is the next 2019 years now, Urban Institute came up with the data that there will be about 6.8 million net new homeowners, and out of which about 4.8 will be Hispanic, which is about 70%. 17% will be black, homeowners, and then the rest will be the other people of color. The white households will actually go down on a net home ownership level by about 1.8 millions. that's one data point. The second is the single females are now 19% of home buyers, which is from a gender perspective, that's the highest from gender married status perspective, that's the highest. They were about 8% 20 years back, and that has climbed up to 19 and climbing, every year. And similarly, talking about the diversity, the percentage of US adults who now identify to be part of the LGBT community has now grown to about 7%, which is almost double the number it was in 2012. So, on that note, just to kind of set the stage for what kind of opportunity that the industry sees with diversity and inclusion, where we are, let's, bring in our panels and then let's talk about what do you think. So we talked about the fact that this is where the opportunity lies, right? But we also know that home ownership for a lot of communities, I mean, especially if we talk about, say, black homeowners, the gap between the black home ownership and white ownership is actually wider than what it was before the Fair Housing Act came, which entire purpose was to make housing fair for everyone, and that hasn't quite happened. So, what do you think, and l this is a question for all three of you, is in your experience, what are the biggest challenge for making housing available for all and being non-discriminatory in nature? And anyone can start first.
Paul Gigliotti (
So I think the biggest challenge, or maybe it's not a challenge, but I think where the biggest gap is, lack of education. so we're talking about one of the biggest opportunities in someone's life, right? So we're talking about home, we're talking about financial opportunity, wealth opportunity, and growth in learning. And where I see the biggest gap is the lack of education. Education leads to empowerment, and therefore, when you're empowered, you have access, it provides accessibility. When you're talking about those stats, Shashank, they're shocking and alarming. They're great, but there's a lot of growth towards home ownership, towards diverse individuals. And what we've done as an industry, as we have concentrated so hard on providing programs available to first time home buyers of, a diverse background, whether that diversity is race, ethnicity, social economic diversity, lifestyle, gender identification, right? But what we haven't concentrated on is educating those individuals on what it means to have a home, what it means to be a homeowner, how do you go about that process? And even backtrack, let's say we haven't even educated individuals from a diverse group on preparing for a homeownership. So, I think once as a, as an industry, we start moving towards down that path of education to empowerment will really start to bridge that gap. Our industry, I read a stat is responsible for anywhere from 17 to 22% of the nation's economic system. And there's zero education out there. So, then if you take a look at the segment of diverse individuals, maybe those individuals didn't have parents that owned homes or siblings that owned homes. So it's an unknown,
Shashank Shekhar (
Lydia, you are the president of National Association Real Estate Broker. So you see it not just at a very small level in certain communities, but you get to see it at a national level, because you're also involved in a lot of policy making and with, with the administration. Where do you see, what did we miss over the last 30, 40, 50 years? So not being at where we should have been by now.
Lydia Pope (
So thank you. So, let me first start, I just wanna always acknowledge my first vice president and my third vice president, education sheriff from nara, they're here to support. But when you talk about our national organization, we've been around for 75 years, and our whole focus on democracy and housing, we believe everyone should own a home. So, we're always a pro. we're always for the home ownership. But the challenge over the course of the years and decades is that when you talk about one thing, and again, I agree, education is so major, but we actually start with affordability. I think what happens is when you look at the income of African Americans, you go from 2010, from, what, 35,000, You only go up about 10%. over a 10 year window, you're only about a 10% increase. So, you take the income and you take it with the affordability of the increase in the sales prices of the properties, the increase in the interest rates is what's happening within our black Americans. It now becomes a challenge. So the affordability becomes difficult. So we just start with that as a basis. That right there is a big challenge. And our goal as a national black organization is to be that voice to advocate on how do we, how do we bring the gap to where we're able to widen and where we're able to work together with all four trade groups. So, there's a lot more deeper, And I know when we talk more about that, I'll kind of go into some of our policies, but it's really the affordability is where we are within our culture.
Shashank Shekhar (
Yeah, great point. Because if the income only went up by 10% and housing prices just in 2021 went up by 16.9%. Yeah. And the mortgage rates went up by 200% this year. So, so the,
Lydia Pope (
You could see that already. It'd be very difficult for, for an average African American even purchase a home.
Shashank Shekhar (
It is, Mosae let's get to you because you get to actually, work with these people on a day in and day out basis. You're, you are extremely focused on serving the underserved, so to say. What do you see as, as a challenge? What do you see fellow loan officers or branch managers, or even companies are not doing to be able to serve some of these people?
Mosi K. Gatling (
When it comes to being able to serve really that underserved market, especially African Americans, there's a couple things at play. I feel that to even really be in that arena, having cultural perspective is a large part of it. having a diverse workforce is really gonna help. It's really gonna resonate with the home buyers, people getting qualified when you can kind of meet them or come from some of those places that they come from and kind of understand maybe where they work and how they earn their income and things like that. If you go to get somebody qualified and you lack some of that background knowledge and you can't phone a friend and figure out what that really looks like, how do you provide them good advice to be able to get in a home? Everybody isn't the same. Home ownership, home buying is a really individualized process. Also, when you talk about mortgage loans, and I know Lydia will kind of chime in on this as well, when it comes to policies and things like that, when you read these guidelines, they are so old and so antiquated, they are back written back. So, I mean, some of them are like 25 years old and it's like, okay, you talk about the Fair Housing Act, Great. You wrote that guideline before the Fair Housing Act. So, if we can bring some of those things forward and change those guidelines to take an account cultural perspective, a big thing, for instance here is the hotels and casinos. If you look at the proportion of workers that may be working at these hotels and casinos in positions that are considered blue collar, such as housekeeping, janitorial, we have thousands and thousands of employees here that work in that area. They not only own earn base salaries. Those base salaries are lower. They are in that $35,000 range, whether you're talking African American, Hispanic, Asian, and then they get tips. Let's talk about loan guidelines and tips. It's cash earnings. You know what I'm saying? It's not gonna work when you're getting them qualified. So sometimes they're missing out when they really do have that money coming in. But getting these guidelines changed at the root where they need to be so we can help more homeowners is not happening. So advocating for that change is a major component as well.
Shashank Shekhar (
Great point. And then you brought, a really good point, Mosae, is the fact that one of the easiest ways to become more diverse and inclusive as a lender is you should look the face, so to say, your team should look the way the community looks. It's, how you serve the community is by having your team look similar to, so that they're not intimidated when they come and try to approach you. They see that there's cultural similarity of the people that they're talking to and themselves that's making it easier for you to approach them. Now, diversifying the workforce has been a challenge. And, Paul, I know that your company is doing a great job on it. And I want to take, get your feedback on two things. One, it's a two way street, right? One is you need to provide enough diversified talent to the mortgage industry, right? So that's a challenge. On the other side, they should find where they're working, kind of welcome a place where they like to work and they don't feel discriminated. So we are trying to solve a problem for the industry, but then the industry needs to be ready to welcome some of these people. Yeah. How, are you working on those two challenges?
Paul Gigliotti (
Those are, really great questions and they're much in line with what you guys were talking about. So you were talking about, the hotel workers, the blue collar workers, they don't make enough money, to pull together the down payment or to qualify, right? And so when I was talking about education, it's not just educating on preparing to buy a home. It's not just educating on the home ownership and the home buying experience, but providing education for individuals that see the opportunity within the industry as a career, as a job. In December of two, what year is it? 2022. December of 21, a statistic came out that stated 77% of the employees in our industry are middle aged white men. And I'm sure all of us can sit back in pretty much not our heads and say, Yeah, that sounds about right. Look in this room. Right? I'm not calling myself middle-aged necessarily , but it's a very factual statistic. So Access Lending Academy has taken both of those, our purpose is to bridge the D & I gap in the mortgage lending industry in the education gap. And so we've looked at this from a very holistic point of view, and I've taken it on as a personal call to action, being a diverse person myself, like many of you sitting in this room, it was really hard for me to walk into a boardroom or walk up on stage and be the only diverse individual. It brought me back to those age days of being bullied in school, right? It brought me back to all those things that went wrong and it kind of plays a head game, right? So our purpose is to educate individuals in this industry that is all about opportunity. So we put 'em through a really robust education program that lasts for 90 days. They get a paid internship, and then we support them and place them in jobs. And the mortgage lending industry. Now, a lot of our placement, because of the economic time right now has been concentrated on FinTech companies. Escrow Tab has hired a few of our lenders. Open Close has hired a few of our learners. So, it's a two part, right? So are we talking about lenders, but we're also talking about solution providers and, and technology companies within the industry. So again, it goes back to educating individuals, providing a point of entry based off of education. What better way to enter an industry? I'm sure most of us in this room entered this industry by mistake from a friend, from a family member. It wasn't on purpose, right? so that's part of the equation of your question. Sure. The second part is our industry ready for this? Is the culture within the lending community, the technology community and solution providers ready for these diverse individuals. And it's nothing against them, but we have to sit back and say, Are they gonna be welcomed? So when we look at diverse individuals, we're looking at that word diverse, It's different. It's something different. So I think first and foremost, what we have to concentrate on is the culture, environment, the ecosystem within our industry. Are they open to different ideas, different ways of thinking? It becomes a shift in mindset. It's a different way of thinking for them. There's nothing wrong with it, it's just a fact. So Access Lending Academy, throughout our education program, our learners are immersed in a really robust wellness program that ensures that our learners, as a diverse individual, you're placed in a box either by society or by yourself. And so our wellness program supports them in tearing down the walls in that box. It supports them with self-empowerment and self-awareness. And so what we do with our wellness program is when the learner goes to the placement partner and they've got a job, we bring our wellness program to the placement partner, and we work with the culture and the environment with our placement partner to ensure that they understand the importance of you've got this individual that has a totally different experience, a totally different lifestyle than you're used to. And that's really good because they're gonna bring experiences into your culture, into your process, into your procedure that you never would've thought of before. So it's a two prong.
Lydia Pope (
Yeah. I wanted to kind of add to you, and, and I agree. I think everything you're saying is right on point. Because when you, in both of you, So when you're dealing with culture within the communities, a black person can work, feel comfortable working in an environment at a bank with a black banker they under in a mortgage company or a banker. And what that does, it just gives them this comfort level. And then when that home buyer, or soon to be home buyer says, Hey, listen, oh, the lender says that you can't afford this loan, or your credit's not ready, just don't stop and walk away. Make sure that there's like a referral basis. Rather it's a mortgage broker or someone of that statue so that they have a go to see in every culture, react differently. In the African American culture, the rejection is already ahead of the game. So you're coming in with a different mindset. So if you walk away with a negative connotation, what it does is that home buyer who could have really qualified, cuz maybe that type of bank institution had different credit criteria. And that credit criteria doesn't mean they can't buy a home, it just means that they don't fit the criteria of the banking institution. So, when that banker says, Hey, listen, or that lender say, Hey, listen, you may can't afford our products, but let me give you a list of companies that can help you because you may fit into their credit score criteria. Then you're helping that client. You're giving them some type of, not just peace at mind, but something where they can feel that they can, they're empower to do so. I do agree with both, but just that, when you walk into a bank is always good to have that, person that looks like you to make you feel comfortable. And I totally agree with the colleges, the university, the students that bringing our students into this. We have so many young folks that's coming up that will love, beat that love to be in this real estate industry. when we have our housing summit that will have in November, we're down at Howard and we'll be talking to the students about student loan. But talking to them about careers in real estate, How can you be empowered? How can you be a real estate agent, an appraiser, a banker, a title company agent? So these are things that we wanna start bringing and graphing our young folks who can really make a difference. The millennial is the age and the Zinnials and all the others that is in that little group there, but they're energetic and they're creative, but we've gotta build them up and get them into the real estate industry. I don't see them in the universities anymore, like we used to credit classes that they can take to become real estate agents or loan officers, at least something that can be accredited for them. So that's a big thing we need to start looking at too, in the education.
Shashank Shekhar (
It makes and success of some of those things you can see from Mosae on being part of the community, being part of that culture, the kind of success that it brings for the community because they're able to buy homes and for herself, because this is an opportunity for language as well. Lydia let's stay, on with you for a couple more minutes here. And then national, Association of Real Estate Board has a four point policy that they think is kind of, detrimental to lower income or lower to low to mid income borrows. when it comes to home ownership, let's talk about some of those policies and let's not just talk about the policies itself, what you're doing, but have you made any progress on that? And then I'll, I'll get the other two panelists viewpoint on that as well.
Lydia Pope (
Sure. So, Narab, this year we came up with what we call our four policies of increasing the black wealth and black housing. Been around for 75 years. Our whole focus is democracy in housing. And we'll talk about those solutions. So one of the four is number one, talking about the restorative down payment assistance. Well, we have to understand that African Americans has been difficult when it comes to down payment assistance, when a totally different culture, different category. Again, I talked about the income gaps, I talked about the affordability gaps. So instead of doing like tax credits, I think the down payment, the actual cash is what we need, as an African American community loan level pricing. Of course, we all hear a lot about that, the elimination of loan level pricing's time to make a change. But around since 2008, it's time that we all just understand that it's time to make a change within the black community and we need to eliminate that totally. Then when you're talking about the student loans, the student loan debt, I get it with the GSCs, I get it with the Freddie and Fanny, the FHA and the guidelines that they set aside and they're doing a great job on that. But we have to also understand that when blacks have a larger student loan debt in one of the highest in this country, how do you equivalate that with affordability? We're back to that affordability now. They can't even buy, even if they have the score, they can't purchase cuz the debt is too high. So I would love to see at some point that the student loan debt is not calculated because that really is a stopping point for a lot, especially our young folks that are in college right now. And then when you're talking about all the other issues for NARAB a from the down payment assistance to the loan level pricing to the the student loans, now we talking to the biggest issue. And so one of the things that we really wanna focus on is our whole area of housing. Black American has had a really big challenge when it comes to the housing arena. We spend so much time working on the Fanny and Feddie product, but we have to talk about the culture of who we are and what we do. So NARAB has taken a position and they said, Okay, how do we change the gamut of our policies? How do we increase it? How do we make a change? And what are we doing about our policies? Well, NARAB has taken a taken a whole piece of that and they said, it's time that we make a change. So that fourth one goes into the appraisal biases, which we've talked is the hot topic right now. Yeah. And appraisal biases as we know that there's been a culture difference. So, some of the things that NARA has taken, we're doing the advocacy, we're the voice. So for appraisal biases, we're saying, Hey listen, let's begin to diversify the appraisals. Let's talk about how can we bring in minority appraisers? What are the statistics? How can we work together as a team to increase that When it comes to the down payment, the programs that are out there now are great special purpose credit programs has hitting every market no matter what it is. Been around since the seventies, but we're now talking about it now. So, I think these special purpose programs really helps a lot with the African American community. And then the last part of this is we're an advocacy group. So, we put our voices out at our events, not just the cbc, the Black caucus. When we talk about the state of housing and Black America, which is one of our reports we've had since 2013. And what that does, it gives statistical data as to what's happening within the African American community. It also talks about the solutions to what we're doing, even though we have the four policies that state of housing, Black America report brings more than just that. It talks about the credit, it talks about the businesses when you talk about the women. And you said on here 19%, but 20 years ago was 8%. We wrote a white paper report called Women Invested in Real Estate that talks about minority women in housing and how they're affected. All this is part of our black housing form that we'll have in November. And also part of the Black caucus. We train our members to understand the importance of creating wealth within the black home ownership, but it's gonna take each and every one of us from the lending institutions to our GSEs, to our congressional folks to bring it down and take those subcommittees and put them into policies. So that's what we're doing. We're advocating all of that.
Shashank Shekhar (
Yeah. And talking about wealth creation and wealth generation, there's data that supports the fact that an average, average renter in Hispanic and well black community has a net worth of around 7 to $8,000 when an average homeowner has a net worth about $184,000. That's about a 28 x multiple. And if you don't let them own home for one generation, you can understand the impact that happens to future generations. Now we'll say one of the pushbacks that a lot of people come back with in making lending easier. Like some of the Lydia's point to the fact that let's remove student loans from the debt to income calculation. Let's bring in more down payment assistance. Let's bring in more affordability for lower income borrowers is the fact that what if we let them own the home? So we make all these guidelines super easy and now they own the home. What happens if they can't sustain home ownership? Right. That's one of the things that comes, comes, a lot of times is that, okay, let them get into home, but if they don't, if they can't sustain home ownership, is that not worse than what it was before, at least. And you have worked on, I you shared some of the data about what the FHA came back with you about. And I would like you to share that with the panel in the audience here about some of the sustainability of home ownership that your clients have right now.
Mosi K. Gatling (
I'll repeat after you. I'll come right after you.
Lydia Pope (
Over the last couple of years when I guess we could say home buying is running rampant, lots of people wanting to get qualified, trying to find homes, I did implement a little bit of a system because it was taking people a little bit longer to find that home, which I'll be honest, a lot of times in my minority communities they come and kind of kick tires a little bit anyway, before they would jump and buy. They just wanna hear about it. What does this look like for me? Help me figure this out. So while that's going on, we implemented some plans with our buyers that were getting qualified because I didn't wanna just do home loans. I want them to keep their house. I've been around long enough, I was around in 2008, 2009, 2010, and being in the same market, those same people come back around to you and you have to see them back sitting in front of you and you're like semi mortified of what may have happened over those few years. Were they able to keep their home? Was their family affected? So that kind of affected my decisions and my wants going forward. over the last two years, we did 342 loans that are being tracked by hud. approximately 2.6 of percent of those loans, which is eight, are being reported as being delinquent more than 90 days. So, more than 96% of those, buyers out of that 342 are actually marked with HUD is underserved, which is huge. And they are paying their homes and happy in their homes, which makes my heart sing that I'm not just making a paycheck, but I'm actually helping my community families, the people I got to look at in their face and neat and get to know their kids. What we did was we said, Hey, while you're waiting to buy a home, how much is your rent right now? 1300 these people qualified. Great. You're gonna buy a $350,000 house. Your payment is now gonna go up to 2345 with your association. What I need to do to make your loan look great and also help you build a little bit of a nest egg even though you already have money. I need you while we wait to actually save the difference of what your payment will be to what you're paying now. So, what I need to see is a thousand dollars a month go into your savings account. What that does is it helps these people be able to build that savings. Not only that, it absorbs payment shock. You can't take somebody paying 1300 and say, boom, here's 2300, go ahead and sort your bills out now because your statement already came to the house. No, we were getting them ready before it started letting them know what that payment looked like. Having them establish that budget, whether not to go directly spend it on down payment, but to get adjusted to paying that in their lifestyle. Get adjusted to it, the daycare, the bills that you don't put on the home loan application. So they're prepared and ready to sustain because you're right, not sustaining home ownership turns into gentrification. Their homes get resold. Other people move into the neighborhood, it boosts the prices. And now you have unaffordable homes. And I won't even get on giving student loans and loans and debt to people where they don't have to qualify in the first place. Cuz that is the root of the student loan problem. They already got it. I can't do anything for you, but what I could have done when you were in high school is talk to you about debt once you really wanna do in life. So when my children, I have a, I have five actually. So as my kids got older, I have three of them that are 19 or older and out of high school and one graduating, next year. So, I looked at them and said, No, let's talk about what you really wanna do in life cuz you're not gonna waste my money and I don't want you ruining your life by not being able to afford a home. Because what's important is a home, My 23 year old closed on a house last year after working, saving money on her own and being able to put away while living with me what a cost a house payment would be. It made her successful. She is not having issues. There was no payment shock. So sometimes if you take that little bit of time or have some programs that are based on tangible results, it is great to sit in a classroom and say, Hey, this is how you pay a house payment. This is what this looks like, but what's really gonna go on to make them be able to afford, sustain? And also telling them your why to pass that on generation to generation. Because I passed it to my oldest, our oldest at 24. She has told many friends, she's been on podcast about how do you buy a house at 23 because somebody, which is happens to be mom. But if there were more people that were interested in doing that, it would help people sustain and also go back and buy back that block That's theirs to start with. Yeah. And keep those communities intact right.
Paul Gigliotti (
It really goes back to like that concept of education. Right? Absolutely. And you have to, you have to do it in the very beginning. , and that's what we all went to school. And we are educated and education, it's a building block concept. So you learn what you learned, you apply it to the next level. So that program is amazing. Fantastic. Congratulations. Thank you. you're instilling you're, you're setting the stage for let's go and get you ready so that when you are ready, we can pull the trigger. I want to educate you on the process. Sure. Right? And and the real meaning, like you said, it made heart sing. That's why we're all, we all really do this. Right? The real meaning of home ownership.
Lydia Pope (
And we have to also understand that the rent, when you talked about the rent , they're paying rent anyways. They're paying 14, $1,500 rent. A lot of times their mortgage payment, that estimated payment is less than what they're paying for rent. And, so if they can pay their rent on time, why can't they have a mortgage and never missed a payment? Many of them have not missed a payment. So I agree with you on that, that payment shock.
(
Right. It can be crazy.
Shashank Shekhar (
Yeah. We could have a day long conference on this and there's so many elements to it.
Lydia Pope (
You want some more?
Mosi K. Gatling (
Everyone stay in the room. We got more to say.
Paul Gigliotti (
Bring a bar in. Let's go. There you go. Yes.
Shashank Shekhar (
The the kind of passion our panelists not just exhibit in terms of passion, but actually their expertise and something they're actually doing on a day to day basis to change the lives of underserved community here is nothing but commendable. But thank you all three of you. unfortunately we'll come to the end of this session, but thank you for staying with us, through this and thank you to all the panelists.