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» VISIT US ONLINE @ DSNEWS.COM 25 CHALLENGES TO BLACK HOMEOWNERSHIP Homeownership is central to the American Dream. However, it is hard for many from minority communities to achieve, according to a report by Brookings Institute, titled "e devaluation of assets in black neighborhoods" that addressed the cost of racial bias. e report found that owner-occupied homes in black neighborhoods are undervalued by $48,000 per home on average, amounting to $156 billion in cumulative losses. It stated that black communities face major impediments to building wealth, commencing and investing in business ventures as well as attaining a proper education, even today. Analyzing the devaluation of black homeownership, the report found that a majority of black neighborhoods hold $609 billion in owner-occupied housing assets comprising approximately 10,000 public schools and over three million businesses. However, homes in neighborhoods with a population 50 percent black people are valued at roughly half the price compared to homes in neighborhoods with no black residents. e analysis is restricted to 113 metropolitan areas with at least one majority black neighborhood. Comparing home values in majority black neighborhoods with those where less than 1 percent of residents are black, homes in majority black neighborhoods have greater appreciation values. e analysis notes that neighborhood quality is not the key reason for the devaluation of homes in black neighborhoods. Homes of similar quality in neighborhoods with similar amenities are worth 23 percent less ($48,000 per home on average, amounting to $156 billion in cumulative losses) in majority black neighborhoods, compared to those with very few or no black residents. e metro areas surveyed revealed that 10 percent of neighborhoods are majority black, home to 41 percent of the black population living in metropolitan areas and 37 percent of the U.S. black population. Approximately 5 million non-black Americans live in majority black neighborhoods, the report indicated. is analysis confirmed the findings that there is a significant correlation between the devaluation of homes in black neighborhoods and the upward mobility of black children in metropolitan areas with majority black neighborhoods, from a statistical standpoint. According to the report, the median home value in majority black neighborhoods is $52,578 while the estimated median home value in majority black neighborhoods, in absence of devaluation is $65,704. e dissimilarity index of the report stated that 57 percent of the white population would need to move to a different neighborhood for the white and black population to be distributed evenly. WHY SINGLE-SOURCE VENDORS COULD BE THE FUTURE In "e State of the Servicer Industry in 2018," Altisource reported that the combination of high home prices and oft- risen interest rates is a sign that servicers will soon see an increase in delinquency and foreclosure rates in their FHA portfolios. And servicers seem to be aware of this "inflection point." Nearly three-quarters of servicers Altisource surveyed said they expect their FHA portfolios to increase within the next two years. FHA loans already have increased, after a wave of interest early this year from buyers with lower credit who capitalized on the FHA's Claims Without Conveyance of Title, or CWCOT, program's more lenient down payment requirements. With the upswing in FHA loans, though, comes the increased risk of defaults in FHA portfolios, especially as rates continue to climb. And while price escalation has been slowing down in the latter half of 2018, values remain out of reach for average and below- average earners in many markets, where wage growth has not necessarily caught up. With the possibility of more defaults looming, servicers say they are overwhelmingly likely to take a single-vendor approach to managing multiple services. Nine in 10 servicers, in fact, told Altisource that they are strongly leaning towards a single-source vendor, with two-thirds citing efficiency and compliance management as the main reasons. Single-source vendors are also an increasingly appealing option simply because of their prevalence. e sector grew as the housing market recovered from the crash and the glut of properties once maintained by small networks of vendors gave way to consolidated resources. If there's a hang-up for servicers, it's that they're having a lot of trouble finding single- source vendors they feel comfortable working with. Altisource says more than half of the servicers surveyed said they had trouble finding good vendors for trustee and auction services. at said, 73 percent of servicers said they are using third-party as part of their CWCOT program, mostly because those vendors provide end-to-end services. But 57 percent say they wish the data analytics these vendors used were not as efficient or effective as they could be. The net share of consumers who expected home prices to go up fell 4 percentage points during January 2019, according to Fannie Mae's Home Purchase Sentiment Index. KNOW THIS

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