PowerPoint Presentation - Pan African Community Endowment

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Enhancing the philanthropic capacity of
communities of color June 2007
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Pan African Community EndowmentThe Saint Paul
Foundation
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The Pan African Community Endowment

• Is one of the component endowments of
  SpectrumTrust of
• The Saint Paul Foundation. SpectrumTrust
  includes three other culturally specific
  endowments and a multicultural endowment
• Multicultural Endowment
• Asian Pacific Endowment
• El Fundo de Nuestra Comunidad
• Pan African Community Endowment
• Two Feathers Endowment

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The Pan African Community Endowment

• Mission Promote philanthropy within the
  Pan African community and develop philanthropic
  resources appropriate to Pan African history,
  culture, and traditions.
• The Endowment strives to be equitable, diverse,
  and accountable to its community.
• It seeks to work in collaboration with the
  community to develop a sense of ownership and
  self-determination.

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Pan African Community Endowment Housing
Initiative Committee

• Raising Issues,
• Funding Solutions

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Why a Housing Initiative Committee?

• Charged with creating a common voice for certain
  housing issues affecting Minnesotas
• Pan African community.
• Committee work includes
• Convening those working with the Pan African
  community on housing to discuss and develop
  strategies to address housing issues.
• Publicizing innovative research, organizing, and
  advocacy activities that support efforts to
  address housing issues faced by the Pan African
  community.
• Making annual housing grants with a goal of
  improving public awareness of housing issues that
  affect Pan African communities and identifying
  the root causes of inequality in housing as
  experienced by broad segments of the Pan African
  community.

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Past Grants

• Over 10 years, the Pan African Community
  Endowment has awarded 126 grants totaling
  475,000 to organizations
• and initiatives.

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Housing grants

• Affordable housing forums and information packets
• Affordable housing research (cited in a 325
  million nationwide settlement regarding predatory
  lending)
• Financial services collaborations
• Financial literacy education
• - Greater awareness of the effects of sub-
  prime lending and foreclosures in the Twin
  Cities
• Advocacy/organizing to stop demolition of 900
  affordable housing units

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Critical Issues ??Homeownership
rates? Rejection rates??Foreclosure rates?
Predatory Lending Credit Scores??Homelessness
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Homeownership rates
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The Homeownership Rate for Blacks in Minnesota
is Declining
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Losses Instead of Gains

• Homeownership rates for blacks in Minnesota
  slipped from 32 in 2000 to 29 in 2005.

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A Change in National Ranking

• Minnesota now ranks 45th out of 50 states and
  the District of Columbia in homeownership rates
  among black households even though the state
  continues its rank of 1 for homeownership
  nationally.

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Rejection rates
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• In the largest metro areas, the average home
  loan rejection rate for blacks with incomes above
  120 of the metro areas median income was 21,
  well above the 8 average for whites.

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• The Charlotte Observer reported in August 06
  that blacks who borrowed from 25 of the nation's
  largest lenders were 4 times more likely than
  whites to pay high rates.
• Even blacks with 100,000 annual incomes were
  charged higher rates more often than whites with
  incomes below 40,000.

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Foreclosure rates
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• Foreclosures correspond most closely to
  census tracts with the highest concentrations of
  African-Americans, leading many researchers to
  conclude that African-Americans may be suffering
  the heaviest impact.

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Twin Cities Foreclosures Are Increasing

• There were more than 2,000 home foreclosures in
  Minneapolis and St. Paul during 2006

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• Forbes magazine has singled out Hennepin
  County as one of the nations eight metropolitan
  foreclosure hotspots

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• In his 2007 Housing Budget Proposal address,
  Minneapolis Mayor R. T. Rybak reported that there
  were 300 more foreclosures in Hennepin County
  during the first six months of 2006 compared to
  2005,
• an increase of 71.

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• There were 1,531 foreclosures in Ramsey County in
  2006.
• As of May 31, 2007 there have been another 928.

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Predatory Lending Credit Scores
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The Disparate Impact of Predatory Lending

• In Minneapolis, lower income neighborhoods with
  large populations of people of color have the
  highest concentrations of subprime lending.

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Subprime in 4 out of 11 Neighborhoods

• Subprime lenders accounted for more than 15 of
  the refinance loans in 4 out of 11 Minneapolis
  neighborhoods including Near North (35) Camden
  (21) Phillips/Whittier (18) and Powderhorn
  (15).

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• Minneapolis neighborhoods that had the lowest
  rate of subprime lending include Downtown (8)
  Southwest (7) and Calhoun-Isles (8).

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• Near North homeowners who refinanced were 11.6
  times more likely than Calhoun-Isles homeowners
  to receive a subprime loan.

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• Homeowners in Twin Cities neighborhoods of color
  were 6.2 times more likely than homeowners in
  predominantly white neighborhoods to receive a
• subprime loan when refinancing.

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• Blacks were more likely to receive higher-rate
  home purchase and refinance loans than similarly
  situated white borrowers, particularly for loans
  with prepayment penalties.

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• The U of Ms Jeffrey Crump's analysis of the
  federal data from 1997 to 2002 found that Twin
  Cities blacks had a 34 chance of getting a
  subprime mortgage, compared with 10 for whites
  and 8
• for Asians.
• Native Americans and Hispanics had a respective
  22 and 13 chance.

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• An analysis of the credit bureau scores and
  Freddie Mac mortgage purchases confirmed that
  African American borrowers. . . were about three
  times as likely to have high-risk credit bureau
  scores (defined as FICO scores below 620) as were
  white borrowers.

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• Such differences in FICO scores lead directly
  to a higher proportion of rejections and higher
  interest rates.

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• One of the most revealing statistics on the
  true nature of subprime borrowing comes from the
  Federal Reserve it noted that 50 of the subprime
  borrowers had credit scores above 620 the
  threshold to qualify for a prime loan.

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Homelessness
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Homelessness in Our Community
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Homeless Adults
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• African Americans are particularly
• over-represented among Minnesotas homeless
  adults. Wilder Foundations 2006 survey findings
  indicate that 41 of all homeless adults were
  black, as
• compared with just 3 of all Minnesota adults.

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• In 2006,
• nearly half of all homeless persons in the Twin
  Cities metro area were
• African American

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Homeless Youth
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• Racial disparities are also present among
  unaccompanied homeless youth. While only 5 of
  the general youth population in Minnesota is
  African American, nearly 33 of homeless youth on
  their own are African American.

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• 53 of all homeless youth in Minnesota had lived
  in foster homes.
• There is a large (18) over-representation of
  African American youth in foster care compared
  to the general population
• (5)

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An Example of the type of work supported by the
Pan African Housing Committee
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The African Development CentersHomeownershipEdu
cation
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400 in Two Years

• The African Development Center provided
  various home ownership services to approximately
  400 clients from 2004-2006.

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40 (159) of ADCs Clients Participated in the
Homestretch Program

• During 2004-06
• 29 (46) of ADCs Homestretch clients
  purchased homes

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The ADC has Found That New and Established
African Immigrants are Making Progress
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Few Delinquent Loans

• All but one of the 46 homeowners have never been
  delinquent with their mortgage payments.
• All but one never defaulted on a home loan since
  participating in the program.

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• 94 of the clients served by ADC work
  full-time and earn less than 30,000 a year

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• So far, NONE of the ADC clients have become
  victims of predatory subprime lending

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The Pan African Community Endowment Has Joined
With ADC, NRRC and Other Organizations to
Address These Housing Issues in the Pan African
Community
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Join Us in Making a Difference
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Committee Members

• Michelle Rooks, Committee Chair, Wells Fargo Home
  Mortgage Emerging Markets
• Janayah Bagurusi, Twin Cities LISC
• Stephanie Battle, YWCA St. Paul
• Phillip L. Buchanan, Richard Allen Community
  Services, Inc.
• Herman Milligan,Wells Fargo Home Mortgage
  Marketing
• Hussein Samatar, African Development Center
• Sheri Pugh Sullivan, NRRC
• Stephen Wreh-Wilson, African Development Center
• The Pan African Community Endowment Housing
  Initiative is staffed
• by Karen Gray and Nora Hall, Ph.D., GrayHall LLP

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Housing Committees Accomplishments

• Worked with Harvest Consulting Groups, Dr. Wayne
  L. Thornhill to develop and implement a strategic
  plan for the Housing Initiative.
• Funded and distributed a study of Sub-Prime
  Lending and Foreclosure in the Twin Cities. The
  research was conducted by Dr. Jeff Crump,
  Professor of Housing Studies at the University of
  Minnesota which provides empirical analysis of
  homeownership in underserved populations.
• Met with the sponsors of the Dont Borrow
  Trouble Campaign to share Dr. Crumps research
  and discuss ways to broaden the campaigns
  connections with the Twin Cities Pan African
  community.

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• Provided grants to organizations for financial
  literacy services to African and African American
  residents, including a seed grant to the African
  Development Center (a housing and economic
  development organization that primarily serves
  Twin Cities African immigrants). The grant from
  the Pan African Endowment was the African
  Development Center's first grant. It now has a
  budget over 450,000. The Selby Area Community
  Development Corporation and the Northside
  Residents Redevelopment Council also received
  grants.
• Developed a template for a housing Community
  Organizer position that could work in Twin Cities
  Pan African communities. Shared funding of the
  position was discussed.
• Provided emergency funding to an alliance of
  housing advocates for a direct mail community
  education campaign to stop the demolition of 900
  units of affordable housing in Brooklyn Park. The
  demolition of the targeted affordable housing
  would have disproportionately affected Brooklyn
  Park Pan African residents. The 35 million bond
  referendum supporting the demolition of
  affordable units failed to pass.

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• Developed a multi-sector list of Pan African
  stakeholders in the Twin Cities area that are
  interested in housing research, trends, public
  policy, and system-change activities.
• Developed a multi-sector list of partner
  stakeholders who have an interest in supporting
  Pan African housing issues.
• Partnered with Fannie Mae and the Governors
  Emerging Homeownership Marketing Task Force to
  present a financial literacy dialogue with Vada
  Hill, Senior Vice President and Senior Marketing
  Officer, Fannie Mae. Approximately 50 people
  attended the event.
• Wrote and distributed summaries of the dialogue
  with Vada Hill and financial literacy workshop
  series.

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• Became a founding funder of the local chapter of
  the Urban Financial Services Coalition which
  provides access to industry people nationally,
  offers scholarships and financial literacy
  partnerships to people of color.
• Established a faith-based financial literacy
  initiative involving local churches and the
  Minnesota branch of World Vision, an
  internationally based faith organization.
• Partnered with the Urban Financial Services
  Coalition, Wells Fargo, US Bank, RBC Dain
  Rauscher, and the Federal Reserve Bank of
  Minneapolis to support a five-workshop financial
  literacy series. Topics included Wealth Building,
  Demystifying Your Credit Understanding Your
  Credit Score and Its Impact on Your Financial
  Future What You Need To Know Before You Buy A
  Home Financing Your Small Business and
  Enhancing A Career in the Financial Services
  Industry.