National Community Reinvestment Coalition
Remarks as prepared for delivery by
2003 Annual Conference
Secretary Mel Martinez
Wednesday, March 12, 2003
Thank you, John for having me here this evening. I
appreciate your generous introduction.
at HUD greatly appreciate the work that you and your colleagues
at NCRC are doing to strengthen RESPA and to fight predatory loans.
We also are delighted to be working with NCRC on several projects
to identify and build successful community-lender partnerships.
And we certainly welcome your support for the President's initiative
to increase minority homeownership.
Bush and I feel strongly that we must commit ourselves as a nation
to helping more families know the many benefits of homeownership
- especially minority families. I appreciate the opportunity to
come here and tell you what our Administration is doing to make
housing continues to lead the way in shoring up our nation's economy.
The recent news that sales of existing homes rose in January to
a new monthly record is yet another indicator of the ongoing strength
of the housing market, and another sign of a rebounding economy.
HUD, we are committed to increasing homeownership
an adequate supply of affordable housing for renters
better care for homeless individuals and families
communities through economic development initiatives.
Administration wants more families to become homeowners. And we
want more of those families to be minorities. A top priority for
President Bush is to make homeownership a viable option for every
American, especially minorities, who want to own a home.
the homeownership rate in this country reached a record level last
year of 68.3 percent, important gaps still remain for many, including
working families, low-income families, women-headed households,
urban dwellers, young families and especially minorities. By a significant
margin, minority families are less likely to own their own homes.
We know that we can do better!
Bush is committed to closing this homeownership gap. Last year,
he set a bold goal of creating an additional 5.5 million minority
homeowners by the end of this decade. HUD responded by launching
our Blueprint for the American Dream Partnership, and every segment
of the housing industry has joined with us to help meet the President's
President has asked me to report back to him in June on our progress
in carrying out these and other commitments. And I am happy to report
that our efforts to increase minority homeownership are beginning
to reap rewards.
fact, HUD had set a national goal of insuring 1.1 million FHA single-family
mortgages last year. We far surpassed that goal with nearly 1.3
million actual endorsements. Of those, 419,000 went to minority
families, which again was well above our target for the year.
But before we can achieve our goal of 5.5 million new minority homeowners,
we must first help minorities overcome significant obstacles. These
include a lack of understanding and information about the homebuying
process, a lack of capital for the down payment and closing costs,
and poor credit histories.
Many barriers, however, are more institutional. Some lenders refuse
to do business in African-American or Hispanic neighborhoods, or
on American Indian reservations. Also, urban minority neighborhoods
typically don't have a local banking branch on the corner. If anything,
many of these areas have subprime lenders who charge a great deal
more to lend the same amount of money.
And throughout the process of home buying and financing, African
Americans, Hispanics and Native Americans often encounter discriminatory
treatment. It is HUD's responsibility to ensure that individuals
are not discriminated against when seeking housing.
The Fair Housing Act guarantees everyone the right to housing free
of discrimination. And HUD's jurisdiction extends to all aspects
of housing, including the sale, advertising, financing, rental,
design, and construction of almost every unit of housing across
America. But my office is working to eliminate these obstacles and
we are pursuing a number of affirmative measures to promote homeownership.
This is reflected in the President's new budget that we submitted
For FY 2004, we are proposing the largest fair housing budget effort
ever --$50 million to assist the state and local agencies, and fair
housing groups, who help HUD fight housing discrimination and educate
people on their fair housing rights. This will help these organizations
address barriers to minority homeownership at the local level.
also are attacking the problem of predatory lending by reforming
the Real Estate Settlement Procedures Act. This has been a top priority
of mine since coming to HUD and I know that it is a top priority
of yours. And we appreciate the feedback that NCRC has been providing
you know, the mortgage finance process and the costs of closing
remain major impediments to homeownership. Every day, Americans
enter into mortgage loans - the largest financial obligation most
families will undertake - without the clear and useful information
they receive with most any other major purchase. This makes them
vulnerable to predatory lending practices, especially if the buyer
is a member of the minority or elderly populations.
Bush Administration is committed to streamlining the mortgage finance
process, so consumers can shop for mortgages and better understand
what will happen at the closing table. This also will make the process
have received nearly 43,000 responses while the rule was open for
public comment, which was a record for us. And we have spent the
18 weeks since the comment period closed reviewing and cataloguing
each submission. And I believe that the Department has developed
a well-crafted proposal that can reduce settlement costs by an average
of $700 per closing, with an annual savings to consumers as much
as $8 billion.
This kind of savings will have the great benefit of increasing the
number of lower-income Americans who will now be able to buy a home.
We also expect our proposal to promote innovation in the marketplace
and inspire greater public confidence in the mortgage lending industry.
Most importantly, our RESPA reforms will restore clarity, transparency,
and simplicity to the homebuying process.
they ensure greater transparency, our proposed reforms will make
it more difficult for unscrupulous lenders to take advantage of
borrowers. However, let me be clear that although RESPA reform is
an important tool for addressing predatory lending, it will not
end predatory lending on its own. And so we are attacking the predatory
lending problem while preserving a source of credit for those with
less-than-perfect credit histories.
Administration is targeting unscrupulous lenders in part by pooling
the resources of the Federal Government, and helping agencies work
together to fight abusive lending practices. As a result, HUD and
its partners are becoming much more effective in tracking down lenders
who prey upon first-time homebuyers, senior citizens, and minorities.
the FHA has mounted a vigorous assault on predatory practices. This
year, we expect to publish at least 15 new regulations aimed directly
at curtailing abusive lending.
the other regulations are several that will strengthen FHA's ability
to monitor appraisers. These include new rules holding FHA lenders
accountable for the quality of appraisals
licensing and certification of FHA-approved appraisers
implementing Appraiser Watch, a fully computerized system for monitoring
an appraiser's default rate.
additional high-priority regulations are waiting to be finalized,
namely improvements to the Credit Watch program that will help us
identify problem loans and lenders earlier on; a proposal to limit
the number of FHA loans a nonprofit can have at one time; and a
rule to prevent future swindles like the 203(k) scam that threatened
the availability of affordable housing in New York City.
I finish, let me take a minute to tell you a little about what we
are doing to increase the supply of affordable housing in America
and to help families move from multifamily housing to homeownership.
have proposed a $113 million increase in funding for the HOME Investment
Partnerships program in our 04 budget. Overall, HOME will make $2.2
billion in funds available to state and local grantees to help finance
the costs of land acquisition, new construction, rehabilitation,
down payments, and rental assistance. This will result in over 1
million units of housing in the next 10 years.
new budget also will fully fund the President's American Dream Downpayment
Fund, by providing $200 million to help approximately 40,000
low-income families annually make the move into homeownership. And
the budget continues to strengthen the ability of public housing
authorities to use Section 8 Housing Voucher funds as downpayment
assistance for families who are making the transition from renting
addition, we are working hard to improve the quality of public and
assisted housing, ensure better program accountability, and increasing
housing opportunities for the elderly and those with disabilities.
HUD, we can only do so much. Therefore, we will continue to rely
on the expertise of those of you on the front lines of the housing
industry and those of you at the local level that best understand
forward to working with all of you toward the goal of opening the
American Dream to more families and individuals
up our communities to new opportunities for growth and prosperity.
You and Good Night.
***THIS IS NOT A TRANSCRIPT OF THE SECRETARY'S SPEECH***
Content Archived: March 16, 2010