Peter Milewski

I recently retired after 50-plus years in the mortgage lending industry, the last seventeen years of which were at MassHousing. I was the director of the quasi-state agency’s Mortgage Insurance Fund and also served as the director of homeownership lending. 

I constantly struggle with those who attempt to lay the blame for low minority homeownership rates at the feet of the mortgage lending industry. Minority homeownership was the highest priority for the Homeownership Division for the agency. It was also a struggle to balance expanding homeownership through low and no down payment programs, expanded underwriting criteria and lower credit standards, with safe and sustainable homeownership. What good does it do to make it easy for low- and moderate-income minorities to own a home only to see unacceptable levels of delinquencies, foreclosures and homeownership failure?  

The piece in last week’s issue of Banker & Tradesman did touch on some of the contributing factors. It is an extremely complex socioeconomic issue.  

Low minority homeownership rates are the symptom, not the disease. Consider the impact of such variables as discrimination in employment resulting in disproportionately higher unemployment and lower incomes for minorities. Lower educational attainment levels caused by many social problems are also a factor.  

There is also the issue at the high percentage of minority family units lead by a single parent head of households. The economic stress of raising a family on one income is a huge barrier to negotiate when trying to manage household finances, accumulating savings, building generational wealth and owning a home.  

There is also the issue of the crime rates in minority communities that weigh down property values, making it difficult for residents who do own homes to enjoy the benefits of wealth building through home equity. 

Many Forces Must Collaborate 

It was not that long ago when subprime lending facilitated homeownership for families stretching to buy a home, only to witness a large collapse in homeownership, which dramatically impacted minority homeowners.  

In the present time of Black Lives Matter it is time for political, business and religious leadership to initiate a comprehensive plan to address these issues. This plan should include efforts to increase high school graduation and college attendance rates for minorities. It should include a strong minority job training, recruitment and promotion programs to increase the number of good jobs with good pay for minorities. There should be counseling to encourage family stability with two parents working together to support a family. There should be financial literacy programs in schools beginning at elementary school levels.  

The lending industry aggressively solicits new business without the overt discrimination of the past, but it must do more to better service homeowners in minority communities. They need to work to mitigate problems in managing mortgage debt while maintaining the safety, security, physical condition and value of the homes their minority borrowers own. 

The problem is now and has always been the inability to properly coordinate all the resources needed to address all the social and economic issues effecting minority families. But now is a very good time to start. 

Peter Milewski is the former director of the MassHousing Mortgage Insurance Fund and the agency’s former director of homeownership lending.