Black MBA homeownership plan fails, CEO says
Shekhar welcomed the move, but said long-term solutions to a systemic problem can only be found at state and federal levels.
He said, “This is what’s going to shake things up if you’re trying to get three million more homeowners into the home, or reach 50-60% homeowners. You can’t achieve aggressive goals by saying “OK, let’s train the lenders or the brokers with better advice”. “
Industry data shows that the homeownership rate of blacks has not only contracted over the past 50 years, but that the gap between homeownership of whites and blacks in America is shrinking. worse than it was before the Fair Housing Act of 1968, which was introduced to create equal housing opportunities for minorities.
According to Urban Institute figures for the first quarter of 2021, homeownership rates for black households are 45.1%, compared to 73.8% for non-Hispanic white households, while Data from real estate brokerage firm Redfin shows that nearly 16% of black Americans who applied for mortgages last year were rejected, compared to just 7% of white Americans. High debt and low credit scores were cited as some of the reasons for the spread.
One solution Shekhar suggested would be to introduce a program similar to the Veterans Administration loans, which are guaranteed by the US government. “I don’t expect private lenders to take this hit on their balance sheets, it’s the federal government that has to do it if (black households) default,” he said.