During the 2008 housing crisis, an estimated 7 million Americans lost their homes due to foreclosure. African-Americans were hit the hardest with a loss of nearly $200 billion, according to the Center for Responsible Lending.
As the economy has struggled to recover and the housing market is now at a boon, a groundbreaking new program aims to permanently restore the wealth of Black homeownership – through new career opportunities and financial education at historically Black colleges and universities.
The Center for Financial Advancement, to launch this semester at Fisk University in Nashville, “will elevate money management skills, teach students about credit and homeownership plus position many for a financially rewarding career in the mortgage industry,” according to a press release.
Fisk will be the first HBCU to participate in the program, a collaboration between Wells Fargo, Mortgage Bankers Association (MBA), Bank of America, and HomeFree-USA, a HUD-approved non-profit organization that specializes in homeownership development, foreclosure intervention and financial coaching.
“There is desire in the African-American community to move up and to uplift ourselves. We just need a little bit of guidance, some direction and just a bit of advice,” said HomeFree-USA President/CEO Marcia Griffin, a Fisk alumni and founder of the new program. “The reality is this: Money is made off the backs of those who don’t know. The less we know, the more somebody’s going to make off of us. The less we know, the more opportunity there is for rip off. I’m here to show the mortgage, real estate, and finance industries what we can do – not just HomeFree-USA, but what HBCUs can produce.”
Griffin believes the training of the next generation of mortgage financiers by HBCUs could be pivotal. The need to expand diversity and inclusion in the mortgage industry will be crucial as the face of the typical homebuyer is changing and as the population of America becomes increasingly brown, says a statement announcing the program. Unemployment among Black youth is twice that of White youth according to the Bureau of Labor Statistics.
Yet, a 2015 study by the Stratmor Group found:The average age of a mortgage loan officer is 47. About 10 percent of loan officers are over the age of 60 while only 3.3 percent are younger than 30. Only 10 percent of loan officers who reported their ethnicity were Hispanic or Latino, and only 3 percent identified as Black or African-American, while 81 percent self-identified as White. Organizers of the new center say it aims to address all of these racial disparities and more.
“The benefits in this partnership are two-fold,” said David H. Stevens, President/CEO of the Mortgage Bankers Association. “African-American students will develop important money management and financial literacy skills, while also having the opportunity to explore a career in the real estate finance field. At the same time, the industry will benefit from an influx of better educated potential homeowners, not to mention an influx of diverse new talent into the industry who can bring homeownership opportunities in traditionally underserved communities.”
Gross racial disparities in America’s economic outlook are well-known to economists, who say the wealth gaps will not close without targeted efforts. “African-Americans still earn just 60 percent of what Whites earn. We have just 7 percent of the wealth that Whites have. We have double the unemployment rates. Even with equal incomes, we find it more challenging to get mortgages or other access to capital. And our economic rights are being challenged every day,” economist Julianne Malveaux recently wrote in a column, published in Black-owned newspapers across the country.
Disparities in homeownership is “the biggest driver of the racial wealth gap”, concludes a Brandeis University study on the roots of the widening wealth gap. The study also points to “toxic inequality” rooted in policies and tax preferences that “favor the affluent”. This kind of information – typically unknown to many in the Black community – will be taught in the Center for Financial Advancement.
“We are proud to be part of this effort to prepare more African-Americans for successful careers in the mortgage industry while also promoting financial literacy that can lead to an increase in African-American homeownership,” said Brad Blackwell, executive vice president; Housing Policy and Homeownership Growth Strategies, Wells Fargo, the founding supporter of the Center for Financial Advancement. “Wells Fargo recognizes the important role a diverse workforce plays in making homeownership possible for people in all communities.”
Frank L. Sims, Fisk’s immediate past president, worked closely as part of the collaboration to assure the establishment of the center. “The mortgage industry has a tremendous opportunity to work with Historically Black Colleges and Universities and nonprofit leaders to ensure that students are well prepared to be the homebuyers of tomorrow,” said Sims. “By providing college students a sound foundation, the Center for Financial Advancement will play a crucial role in ensuring the financial readiness of future generations.”
Ranked within the top 10 of HBCUs by U. S. News and World Report, Fisk now has a new President Dr. Kevin Rome, who, in an interview with The Tennessean, pointed to “entrepreneurial opportunities” as a possible strategy for growth on campus.
Rome adds, “Fisk has highly skilled and highly intelligent students who can excel in any endeavors that they pursue. It’s important that we seek opportunities in non-traditional highly lucrative fields where African-Americans continue to be underrepresented. As consumers who engage in the banking and mortgage industry, African-Americans should equally benefit from the wealth that is created by the industries. This partnership will hopefully lead to a model that funnels more African-Americans into careers that benefit our community and the American economic engine.”
The more than 700 students from all majors on the 40-acre campus will have the opportunity to use the center.
“The point here is that people from all majors and all skill levels can get into the industry, and this is the industry where money is made,” said Griffin. As an example, she pointed to a HomeFree-USA intern, whose first job at a mortgage agency, paid $80,000 annually – well above the average $50,000 starting salary of college graduates in 2017.
Griffin envisions the Center as a growing program, which will gradually expand to other HBCU campuses.
She also notes that the Center is not just for students, but also for parents, faculty and the community on HBCU campuses. “Because we are in the real estate and financial services business, anything that we can do for and with the families in terms of buying a home, keeping a home, credit enhancement or anything financial. That’s a part of the package.”
At a glance, the Center for Financial Advancement will provide:
- An annual series of five seminars conducted jointly by HomeFree-USA, and mortgage banking leaders.
- The curriculum will include banking and savings basics, mortgage lending, student loan debt, homeownership, credit reports, overall financial capability, and most importantly, enriching information about mortgage industry opportunities.
- Students who complete the entire series of seminars will receive a Certificate of Financial Readiness, signed by the leading sponsors.
- Center partners will have access to a pool of interns and potential permanent hires, get CRA credit and tremendous branding opportunities.
The program is receiving wide applause from the financial industry.
Jeffery Schummer, vice president of Education Business Development for the MBA concludes, “Having more professionals of color in the mortgage business will grow the pipeline of homeowners of color. That’s good for every single aspect of the community.”