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Overcoming the Racial Wealth Gap through the Development of Affordable and Sound Mortgage Lending Products for the African American Community and Communities of Color

WHEREAS, subprime loans, characterized by high interest rates, excessive fees and costs, balloon payments, pre-payment penalties, unnecessary costs for credit life, accident and health insurance, and repeated re-financing targeted at African-Americans, the elderly and women; and

WHEREAS, these discriminatory and predatory lending practices throughout communities of color led to the mortgage and foreclosure crisis that negatively and severely impacted these communities; and

WHEREAS, the February 2013 Study by the Institute on Assets and Social Policy at Brandeis University surveyed the same sample of families over a 25- year period (1984-2009) and found that the total wealth gap between the white and African-American families nearly tripled, increasing from $85,000 in 1984 to $236,500 in 2009; and

WHEREAS, the April 2013 report of the Urban Institute's Opportunity and Ownership Project found that in 2010, white families averaged six times the wealth of African-American and Hispanic households ($632,000 versus $98,000 and $110,000, respectively), up from a 5-to-1 ratio in 1983. The study concluded that this growing wealth gap was propelled by the lower likelihood that African­ Americans and Hispanics own homes, with fewer than 50% of black and Hispanic families owning homes compared to 75% of white families in 2010; and

WHEREAS, these studies confirm: (1) that the racial disparities in homeownership are the largest contributor to the racial wealth gap; and (2) there is a need to ensure that mortgage lending policies are fair and provide equal wealth opportunities to African-Americans and other communities of color; and

WHEREAS, there is a need to take additional affirmative action with the mortgage lending and banking industries in order to repair the damage caused by the mortgage and foreclosure crisis and resulting increase in the racial wealth gap.

THEREFORE, BE IT RESOLVED, that the National Association for the Advancement of Colored People (NAACP) will work with organizations such as the NID-Housing Counseling Agency and other agencies and organizations to develop homeownership assistance and mortgage programs that meet the needs of African-Americans and other communities of color; and

BE IT FINALLY RESOLVED, that the NAACP will then engage with our banking and mortgage partners and other lending institutions to adopt and utilize homeownership assistance and mortgage programs that focus on increasing homeownership and home equity for African-American and other communities of color.