Biden’s housing policy and minority homeownership

Today’s HousingWire Daily features the second episode of Honest Conversations, a miniseries on minority homeownership hosted by HousingWire Digital Media Manager Alcynna Lloyd.

In this episode, Lloyd interviews New American Funding’s Charles Lowery, director of legislative policy and external affairs, and Frank Fuentes, the national VP of multicultural community lending, on how housing policy impacts minority homeownership.

Here is a preview of the interview, which has been lightly edited for length and clarity:

Alcynna Lloyd: The Biden administration has made improving racial equity a significant focus of its domestic policy agenda, as research suggests that ending historic economic and racial inequity should start with housing, specifically with a downpayment. As the industry knows, Biden has introduced his proposed stimulus package and the potential of a $15,000 first-time homebuyer tax credit. Do you think this tax credit will be enough to stimulate minority homeownership?

Frank Fuentes: I personally think getting the stimulus on that tax credit is definitely a step in the right direction. I know a lot of major banks are working on their own proprietary down payment assistance programs. Because of those two facts that I just mentioned, I’m excited and optimistic about the future for minority homeownership. The other piece of it that I’m hoping to maybe see, which I think is key with increasing homeownership in all of the diverse markets across America, is manual underwriting. That’s a very important topic that I think we need to get out there, and hopefully, more and more lenders do more of it, because the bottom line is that minority borrowers do require more manual underwriting.

Charles Lowery: I echo what Frank is saying, and I think that the tax credit is going to be so helpful in terms of down payment assistance. This is such a key factor in one niche that really affects the Black community. Along with that, is access to credit. As Frank mentioned, manual underwriting would give the underwriter some more time to look at the different nuances and cultural differences between our communities — the Black community and the Hispanic community. Frank and I often talk about how different they are, and Patricia Arvielo, the co-founder and president of New American Funding talks about that, too. There are just different cultural issues that affect our communities, and they show up not only in credit but throughout the being of our culture.

Honest Conversations is a miniseries that examines the state of minority homeownership and the factors that have contributed to inequality within American housing. Each Wednesday, tune into HousingWire Daily as we aim to provide listeners with a greater perspective on how race, housing and wealth intersect and what experts are doing to close the gap. Sponsored by Caliber Home Loans and hosted and produced by Alcynna Lloyd.

Below is the transcription of the interview. These transcriptions, powered by Speechpad, have been lightly edited and may contain small errors from reproduction:

Alcynna Lloyd: HousingWire Daily examines the most compelling mortgage, real estate, and FinTech articles reported from the HousingWire news room. Each afternoon, the HW Digital Team provides our listeners with a deeper look into the stories that are helping move markets forward. Hosted and produced by Alcynna Lloyd and Victoria Wickham.  

And now, here’s our host.  

Victoria Wickham: Pulled from the hottest topics coming across our news desk. I’m Victoria Wickham and this is HousingWire Daily. Today’s HousingWire Daily features the second episode of honest conversations, a mini-series on minority homeownership, hosted by HousingWire Digital Media Manager, Alcynna Lloyd.  

In this episode, Lloyd interviews New American Funding’s Director Of Legislative Policy And External Affairs, Charles Lowery, and the National VP of Multicultural Community Lending, Frank Fuentes, on how housing policy impacts minority homeownership. But before we listen, here’s a brief word from our sponsor.  

Brena Nath: Caliber Home Loans is committed to helping customers at all stages of homeownership. Whether you’re the first in your family to buy a home or just a first-time homebuyer, our focus is on getting you into the home of your dreams and helping you stay there. Contact Caliber Home Loans if you’d like to learn more.  

Alcynna Lloyd: Hello, listeners. Welcome to Honest Conversations. The show that examines the state of minority homeownership in America.  

I’m your host Alcynna Lloyd. Today my guests are Charles Lowery, director of Legislative Policy and External Affairs at New American Funding, and Frank Fuentes, the national VP of Multicultural Community Lending, who’s also with New American Funding. And today we’ll have an honest conversation on housing policy.  

Before we dive deep on today’s interview, can you let us know a little more about your individual backgrounds?  

Frank Fuentes: So, my background is actually pretty simple. I haven’t done anything else than mortgage for the last 21 years. I was one of the first originators here at New American Funding back in 2000. So, I started as a loan officer. For the last 21 years, I’m focused on mortgage.  

The reason I was hired at New American Funding was to deal primarily with Hispanic borrowers. And that has been my focus and my passion for the last 21 years. I’m still an active originator, even though I am in the role of national VP of Multicultural Lending, with a strong focus on the Latino sector.  

Alcynna Lloyd: Thank you. And Charles, what about you?  

Charles Lowery: Well, my background is quite different from Frank’s. So, it’s, I think, makes us a good team, a good pair of partners. After college and law school, I was really looking at how to help my community. And so, I’ve worked in a number of different capacities beginning with legal aid, beginning with government, and then, moving into working with DC government in the office of banking and financial institutions.  

And that’s where I found an ability to connect my economics background with my legal background in order to help people. And one of the first things we faced when I was at that office was amending DC’s foreclosure laws. And that’s how I really came to meet all the different parties that are involved in a foreclosure in the housing arena.  

And from that, moved on to various nonprofits including the Center for Responsible Lending, the Consumer Federation of America, and then the NAACP. And the NAACP also gave me an opportunity to touch the housing arena. Because through their work, I interacted with a company that serviced subprime loans, which were many of the loans that people in the minority communities have.  

And that’s my background in terms of how I really just came upon the housing area. And now, I’m happy to be with New American Funding.  

Alcynna Lloyd: Thank you for sharing that. So both of you have backgrounds with working with minority homeowners. So can you tell us what your current roles at New American Funding entail. Are you often working with minority homeowners right now? I know, Frank, you mentioned that your work pertains to Latino communities. So interested in diving a little deeper on that?  

Frank Fuentes: Sure. So currently, I actually, like I said earlier, I wear like two or three hats here at New American Funding. Primarily, it’s the VP of Multicultural Lending with a strong focus on the Latino market. And what I do there is basically get involved in every aspect of outreach to the Hispanic market with the ultimate goal of increasing Hispanic homeownership, whether it’s marketing, product development, underwriting, sales, basically anything and everything having to do with mortgage.  

And anything that would impact the Hispanic market. I worked directly, hand in hand, with both owners of New American Funding, Patty Arvielo, which is also a Mexican-American and makes her, I think the only Latina, minority-owned mortgage company in America.  

So very proud to work alongside her. Her and I have been working together 20 years on the same mission. So that’s what I do in my national VP role. I also act as a producing branch manager, run a team of originators and do a couple of loans here and there myself.  

Charles Lowery: And just from my point of view, I’m coming in new-to-New American Funding about…I only been there a few…I guess it’s been maybe six months, Frank. I think it’s going on soon. But, you know…  

Frank Fuentes: I’m flattered.  

Charles Lowery: …and I appreciate the longevity that Frank has and the work that he and Patty have done, particularly when we get a chance to talk about the Latino Focus. But in my job, it’s a really a dual role. I was director of Legislative Policy and External Affairs. I’m wanting to help and hoping to help New American Funding, really be involved here in Washington, DC, on the policy front regarding housing matters.  

Now, that New American Funding has begun to be so successful at its work. I think it needs, and others often say, “If you don’t tell your story, someone else will.”  

Frank Fuentes: No one else…  

Charles Lowery: So… Or no one else will. So we want to tell our story about the success of New American Funding and to be involved in the government issues and policy issues here in DC. Then you add in the New American Dream, the initiative around black homeownership, as the advisor to that program. I’m happy to be doing that as well.  

Alcynna Lloyd: So you both are perfectly suited for this next question. So our next question, we’re diving right into it. It has to do with the Biden administration. The Biden administration has made improving racial equity a significant focus of its domestic policy agenda. As research suggests, that ending historic economic and racial inequity should start with housing specifically with down payment assistance.  

As the industry knows now, Biden has introduced his proposed stimulus package and the potential of a 15,000 first-time homebuyer tax credit. Do you guys think that this is enough, or does more work needs to be done?  

Frank Fuentes: Well, I personally think it’s definitely a right…step in the right direction, getting the stimulus on that tax credit. I know a lot of, a couple of major banks are working on their own proprietary down payment assistance programs. So I’m excited and optimistic about the future for minority homeownership because of those two facts that I just mentioned.  

The other piece of it, I’m hoping to maybe see, and then this is something we can dig in a little deeper, which I think is key with increasing homeownership in all of diverse markets across America which is manual underwriting. Okay. So that’s a very important topic that I think we need to get out there. And hopefully, more and more lenders do more of it.  

Because the bottom line is that minority borrowers do require more manual underwriting.  

Charles Lowery: I would echo what Frank is saying. And I think that the tax credit is going to be so helpful in terms of down payment assistance. And that’s such a key factor and one that’s really, really affects the African-American, the black community.  

Along with that also is the access to credit. And as Frank mentioned, the manual underwriting would give the underwriter some more time to look at the different nuances and [crosstalk] differences and cultural differences between our communities, the black community and the Hispanic community. Frank and I often talk about that they are different…and Patty talks about that too.  

They’re just different cultural issues that affect our community, and those show up all through our credit and all through our whole, being in our culture. And I think that, that has to be recognized. I also want to say that here in DC there is a movement afoot to really look at black homeownership and how to…what else is needed.  

The Mortgage Bankers Association, a group called the Black Homeownership Collaborative, the comptroller of the currency has a Project REACh, maybe you’ve heard of that. It’s looking at minority homeownership. Out of the summer and the social justice awakening that our country has, this is a great time to be focusing on minority homeownership, on black homeownership in particular.  

And I think that looking at ways that we can expand, and grow, and build upon that tax credit is so important.  

Frank Fuentes: Absolutely.  

Alcynna Lloyd: I agree. These are initiatives that we’ve heard from a few of our other guests that people are launching, which is super exciting to hear that. The fire and the passion behind championing minority homeownership is growing larger and larger. And so, that also leads me to my next question, what are some initiatives that New American Funding has launched to tackle this topic?  

Frank Fuentes: Sure. So at New American Funding, we have two major initiatives, one of which is our Latino Focus initiative, which I personally spearhead. Our Latino Focus initiative started back in 2013. And followed up by the New American Dream initiative that I’m going to let Charles talk about. So with the Latino Focus initiative, basically, it started as a mastermind conference call that we had with branch managers, loan officers, couple of underwriters, and just to basically mastermind, troubleshoot what was going on in different areas of the country in terms of underwriting primarily.  

Okay. So that was when Latino Focus started. So that evolved into an award-winning initiative within the mortgage industry, where it became a series of events. We hosted, probably, I’ve got to say, two or three dozen events across the country, Latino Focus events, in different markets.  

And basically bringing education, bring education to the different regions, and creating networking within our loan officers and real estate practitioners, and really bringing insight as to how to reach the Hispanic market. How to market to them.  

How to conduct business. How to ultimately get more Hispanics into homes. So that’s kind of the evolution of the Latino Focus initiative.  

Charles Lowery: And I just want to follow again, behind Frank on that. The thing that I’ve learned, being at New American Funding, is how organic the Latino Focus project came, and how it’s all in Frank’s head in terms of what’s been done over the years. But he and Patty did an amazing job putting that together.  

I think as we talk about cultural differences and just differences that exist for the black homeownership initiative, New American Dream, we’re trying to build that up, particularly in the wake of the things during the summer, in a different way. We’re also hampered or hamstrung by the pandemic and what’s happened.  

So we…like Frank and the strong partnership that Latino Focus has had with Freddie Mac, we’re also partnering with Freddie Mac. We’re doing a series of webinars to really get the issue out, and to advertise, and to bring loan officers and others in the housing community to a more of an awareness about what’s needed in the black community to be successful.  

And we want to use our data that we’re beginning to…now have data that shows the impact that New American Funding has had on terms of increasing Latino and Hispanic homeownership as well as black homeownership. We have the data that really proves that.  

So if we can really show that and we can, then, dig into those numbers and say, “Well, how do we get there?” and then, we can want to recreate that and also show others how they can get there.  

Alcynna Lloyd: All right. So that’s awesome. And as we wrap today, I’d like to ask each of you a question. And this is my favorite part of Honest Conversations as I asked the same two questions. But what is your biggest area of concern for minority homeownership and what can the industry do today? I know New American Funding is already doing a lot, but what can the other parts of the industry do today to address and champion minority homeownership?  

Frank Fuentes: Okay. My biggest concern is the lack of originators to mirror the communities we serve. I know for a fact that there are several pockets around the country, particularly in the Southeast, in the North Atlantic, where Hispanic populations are growing much, much faster than the amount of originators that exist in those markets to serve this burgeoning demographic.  

So that’s my concern. We here at New American Funding have certain initiatives to bring in this next generation of loan officers. So we are working on that. We know the importance. I know the MBA has a program as well via XINNIX. But I just feel that that’s something that really, really needs more attention, maybe more support from…I don’t know from the federal government or the MBA.  

And just bring more awareness about the opportunities, the amazing opportunities that exist in the mortgage industry, and bring more minorities into the business to ultimately help more minorities.  

Charles Lowery: And I follow up…I agree with Frank and what he says there. But I also think that as well as the industry, and it is important, as Frank says, to mirror the communities. I think to be able to most effectively do that we have to continue to show the strengths of these communities.  

The fact that the Harvard University, the housing center there speaks to the fact that the minorities, our community is going to be the homebuyers of the future, right? And continues to grow in percentages there. So I think we have to tell that story, which then reinforces what Frank says, the need for people in the industry to mirror those that they serve.  

And then we also want to be able to, again, be able to distinguish between the needs of the different minority cultures, the black community, Hispanic community, Asian community, and educate people about that. And the particular needs that each community has in the black community, the access to credit, down payment assistance are so important.  

So my concern is that after the pandemic is over and the George Floyd and other issues around social justice aren’t a memory but become farther back in our minds, are we still going to be committed? I want to see that same commitment each and every day going forward just like we’ve had over the past year.  

But we have so much to do and we… Now more people are concerned, are awakened, are realizing the differences that exist, the disparities in our society. And we need to hold on to that and work to make change.  

Frank Fuentes: One final comment I want to make that, again, I’m super excited and passionate about increasing homeownership across all minority sectors, is that according to the census bureau in 2020, both the African-American and Hispanic homeownership rates increased by almost 3%. Okay?  

Considering that the African-American homeownership rate has been pretty stagnant for the last several years. So these are great indicators that initiatives, that lenders are participating in recently are working. And this is the time to continue the momentum and continue pushing forward. So I’m very optimistic about the future and what it holds for minority homeownership.  

Alcynna Lloyd: All right. I’d like to thank you both. I learned and heard some really interesting things like manual underwriting is super interesting to me. And the fact that we need more people of color in these areas to represent the growing homeownership category. So, I’d like to say thank you so much for joining us today and, guests, join us next Wednesday for some more Honest Conversations. 

Frank Fuentes: Thank you very much for having us. It’s been a pleasure.  

Charles Lowery: Thanks so much. We’re glad to be here.  

Alcynna Lloyd: Now, more than ever, the housing industry is looking to its leaders for answers. That’s why each week The Housing News podcast invites a new mortgage, FinTech, or real estate executive to the show to provide its listeners with more perspective on the announcements and news stories crossing HousingWire’s news desk. Hosted by Sarah Wheeler and produced by Alcynna Lloyd, The Housing News podcast is now available on iTunes, Spotify, Apple, Google podcasts, and more.  

Alcynna Lloyd: That’s a wrap for today’s episode of HousingWire Daily. Remember to subscribe, rate, and review on Apple podcasts and join us again tomorrow.  

Housing News

Hosted by HousingWire Editors, the HW Weekly Newscast is a conversational look at the most important stories coming across HousingWire's news desk.

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