MassHousing Blog

Reaching Out

While minority homeownership rates have historically been around 40% (compared to almost 70% for non-minorities), minorities who bought homes within in the last 6-8 years suffered disproportionately from the subprime loan meltdown, declining property values, rising unemployment and the foreclosure crisis.

MassHousing has long believed that immigrants and minorities have been underserved when it comes to quality mortgage products. As a result, in recent years we have implemented public awareness campaigns aimed specifically at potential minority homebuyers.

Alongside spreading awareness of MassHousing's affordable and responsible fixed-rate home mortgage loans, these campaigns promote homebuyer education, financial preparedness, and well-informed decision-making.

After several years of traditional newspaper/TV/radio/Web advertising, we recently launched a new effort to reach underserved homebuyers using social media channels and retail marketing tactics. In addition to our English language Facebook, Twitter, Flickr, YouTube and RSS channels, we’ve launched a Spanish Facebook page, and will soon launch one in Portuguese. Spanish and Portuguese YouTube videos and Twitter feeds will be released by summer’s end.

During a three-hour "Linea de Ayuda" (The Help Line) June 8 on Boston’s Telemundo, 150 consumers took a break from their favorite telenovelas and called in to ask MassHousing staff and lending partners about responsible homebuying.

We also recorded a series of half-hour programs that will be heard on Portuguese-language radio station Brazil 650AM, and seen on Boston-based Spanish-language MasTV. The programs address numerous homebuying and homeownership issues and will be aired during over the next 10 weeks.

MassHousing also co-sponsored the Asian-American Dragon Boat Festival on the Charles River, where we built brand awareness of our products and talked face-to-face with prospective homebuyers.
Later this summer, on August 21, MassHousing will co-sponsor the annual Latino Family Festival at Fenway Park.

These are just a few of the grass-roots outreach efforts MassHousing will be participating in over the next several months. Our goal is to support homeownership for well-informed, qualified and properly prepared minority homebuyers who may be reluctant to take advantage of today’s buyer’s market.

Home ownership still popular, poll finds

With all the gloomy news about the housing market, you would think most Americans had given up on the idea of home ownership. Turns out that's not the case at all, according to a new poll.  You can read about it in this Wall Street Journal blog entry.  Then, come back and learn more about our affordable home mortgage loans.  Remember, for many people it is a great time to buy.  Interest rates are low and home prices are lower than they have been in many years.  Got thoughts, questions or comments on the home buying process?  Why not post them to the MassachusettsFirst-time Homebuyers Facebook Page? 

QRM Conundrum

The comment period on the definition of a Qualified Residential Mortgage (QRM) or "QRM Rule" in Section 941 of the Dodd-Frank legislation passed last year has been extended from June 10 to August 1, 2011. This came as a result of pressure brought upon Congress by a coalition of industry groups led by the National Association of Realtors. The group effectively argued that the rule that limited a qualified residential mortgage—exempt from additional risk retention reserve requirements—to loans with 20% downpayment, would have had severe unintended consequences and stopped the fledgling real estate recovery dead in its tracks.

It is our hope the Congress and the regulators involved in creating the rule would use the additional time to consider the success that Housing Finance Agencies (HFAs) have had with low downpayment mortgages throughout their history. HFAs—and MassHousing is no exception—have found that 30-year, fixed-rate, mortgages, made to creditworthy and financially qualified borrowers using full documentaion and sound underwriting can and do perform well, even under stress and even with low downpayments.

A qualified residential mortgage (with a small q, r and m) historically has involved risk evaluation of several key criteria including credit quality and capacity of the borrower, the application documentation methodology, the type and structure of the mortgage product, the intended use of the property, purpose of the loan, and the net exposure to the mortgage holder after downpayment and insurance.

Between 2004 and 2010 MassHousing's Mortgage Insurance Fund insured over 1,500 100% LTV loans. Of those, 625 had credit scores above 720 and debt ratios under 41%. Of those 625 100% LTV loans insured by the MIF with those credit standards, we have experienced just one foreclosure and claim.

No one knows better how to develop safe, affordable, and sustainable home financing options than state HFAs. We hope that with housing finance reform, legislators, regulators and lenders all learn from HFA experience and look to us as cornerstones of their future home financing plans.