finance discussion
Closing the Gap in Homeownership Rates: How Fannie Mae and Lender-Partners Can Close the Gap
Sullivan University
MGT 510
Executive Summary
This proposal addresses the gap in homeownership rates between whites and minorities. According to the United States Census Bureau, 67.9 percent of the population in the United States are homeowners. However, while 71.8% of Whites are homeowners, only 47.3% of African Americans and 48.2% of Hispanics are homeowners. This large gap in homeownership rates can be contributed to discrimination by lenders and minorities’ misconceptions about the lending process. To overcome these issues, lenders need to eliminate discrimination and reach out to minorities. Ultimately, lenders who discriminate are going to hurt their own bottom lines since minorities represent a large market that has the high potential for growth.
Introduction: Homeownership is the “American Dream”
Housing has often been referred to as the #1 creator of wealth in the United States. It has been called, (1) the leading consumer product, (2) the leading consumer investment, and (3) a leading economic driver. Homeownership, in short, is the “American Dream.” It creates wealth. If you purchase a home today, with appreciation and through upkeep, it will be more valuable in the future. That appreciation provides homeowners with opportunities to create wealth. According to the Perlo (2003), in the latest Survey of Consumer Finances, published by the Federal Reserve Board, the median family that owned their home had a net worth of $171,700 in 2001 as compared to those without a home, whose net worth was only $4,800 in 2001.
Homeownership also provides economic security and creates opportunities. You can pass your wealth on to the next generation. You can withdraw the equity to fund your children’s education, make
Sullivan University
MGT 510
Executive Summary
This proposal addresses the gap in homeownership rates between whites and minorities. According to the United States Census Bureau, 67.9 percent of the population in the United States are homeowners. However, while 71.8% of Whites are homeowners, only 47.3% of African Americans and 48.2% of Hispanics are homeowners. This large gap in homeownership rates can be contributed to discrimination by lenders and minorities’ misconceptions about the lending process. To overcome these issues, lenders need to eliminate discrimination and reach out to minorities. Ultimately, lenders who discriminate are going to hurt their own bottom lines since minorities represent a large market that has the high potential for growth.
Introduction: Homeownership is the “American Dream”
Housing has often been referred to as the #1 creator of wealth in the United States. It has been called, (1) the leading consumer product, (2) the leading consumer investment, and (3) a leading economic driver. Homeownership, in short, is the “American Dream.” It creates wealth. If you purchase a home today, with appreciation and through upkeep, it will be more valuable in the future. That appreciation provides homeowners with opportunities to create wealth. According to the Perlo (2003), in the latest Survey of Consumer Finances, published by the Federal Reserve Board, the median family that owned their home had a net worth of $171,700 in 2001 as compared to those without a home, whose net worth was only $4,800 in 2001.
Homeownership also provides economic security and creates opportunities. You can pass your wealth on to the next generation. You can withdraw the equity to fund your children’s education, make
References: Coleman, T. (2005, July 24). Goal: homes for minorities. Saint Paul Pioneer Press pp Jackson, A. (2005). Closing the homeownership gap. National Mortgage News, 29 (25), 17-21. Hannon, K., et.al. (1996, August 26) . Report cards for mortgage lenders. U.S. News & World Report Perlo, A. (2003, February 8). People before profits: Systemic discrimination in home ownership Sitaramiah, G. (2005, July 24). Buying into the dream. Saint Paul Pioneer Press pp. 3, 7. U S Census Bureau. (2005). Census of Homeownership in the United States: 2000-2005