First American Title extends program to bridge
African American homeownership gap

From the Globe Real Estate Desk

In a trend that has continued since the 1990s, homeownership in the United States continues to increase.
    However not all Americans have benefited from the trend. Nationally, only 50 percent of African Americans are homeowners, compared with 75 percent of whites. In the nine-county San Francisco Bay Area, the percentage is even lower - only 40 percent of the Bay Area’s African Americans own homes while roughly 64 percent of the Bay Area’s non-minorities are homeowners, according to U.S. Census figures.
    Recognizing that homeownership is the single most powerful tool a family can use to improve its net worth and quality of life, First American Title Insurance Company is taking an aggressive role to increase minority homeownership through its San Francisco Bay Area Diversity Marketing Program. First American Title processes one in every seven real estate transactions in the United States.
    The Bay Area Marketing Diversity Program operates in conjunction with the First American Corporation’s broader Emerging Markets Program, a corporatewide effort launched in 2003 to promote homeownership among the African American, Asian American and Hispanic populations.
    Elements of the program include strategic industry alliances; consumer-focused outreach and education; specialized programs for real estate professionals; philanthropic giving and investment; and the hiring and training of staff to service ethnically diverse communities.
    The surge in homeownership over the last 15 years, powered by record-low interest rates, has not translated into the African American population, and black homeownership may even be declining. The national homeownership rate for blacks stood at 48 percent at the end of 2005, compared with 49.1 percent a year earlier.
    The gap in the homeownership rate between blacks and whites has only declined by 1.5 percent over the last 15 years and “stands roughly where it stood 40 years ago,” said Stacey Stewart in a 2004 presentation to the Congressional Black Caucus. “If this new millennium is to become the millennium of equality, more African Americans must become homeowners. More African Americans must have the opportunity to build wealth,” said Stewart.
    In 2001, the net worth of a white family was more than seven times greater than that of an African American family. (Net worth is defined as total earnings and assets minus debt.) Homeownership is a huge part of building net worth. According to the Center for Responsible Lending, in 2002 half of the African American households that did own homes held 88.1 percent of their net worth in their home equity.
    Industry experts cite barriers common to minority communities as reasons for the disparity in the homeownership rate. These barriers include lack of traditional credit, lack of affordable housing stock and a lack of knowledge regarding the home buying process.
    On Feb. 17 First American Title Insurance Company brought together more than 300 real estate professionals and industry leaders to discuss ways to increase homeownership for African Americans. The event was entitled “Maximizing Wealth Through Homeownership: Opening Doors for African American Homebuyers” and was held at Linen Life in Emeryville.
    John Bryant, the event’s keynote speaker and founder/chairman of Operation HOPE, Inc., which promotes economic empowerment through financial literacy, noted that true wealth building for most American families begins with owning a home.
   “Homeownership is the very foundation of America, and if African Americans don’t participate in that, then we are not participating in real freedom in America,” said Bryant
   “The wealth gap between African Americans and whites is primarily due to past institutionalized discriminatory housing and mortgage financing policies, and over the most recent few decades, housing affordability and disparate and predatory practices in the housing and mortgage finance industry,” said Ronald Branch, former president and CEO of the National Association of Real Estate Brokers, the oldest minority real estate trade association in the United States.
    For more information about First American Title Insurance Company visit www.firstam.com.