The UNC Center for Community Capital is your source for research and policy analysis on the power of capital to transform households and communities http://www.ccc.unc.edu Testimony before the U.S. House of Representatives Subcommittee on Financial Institutions and Credit for Consumers http://www.ccc.unc.edu/documents/092211_Testimony_Kimberly_Manturuk.pdf Thu, 22 Sep 2011 Homeownership can be less costly than renting for low-income households and may provide them with a greater sense of well-being, even during times of economic upheaval, a UNC Center for Community Capital researcher told policymakers and others convened for the Federal Reserve Bank of Cleveland Policy Summit, "A Conference on Housing, Human Capital and Inequality," June 9-10. http://www.ccc.unc.edu/documents/LIHO.DurFinanCrisis.ClevelandFed.2011.Riley.pdf Tue, 14 Jun 2011 This paper identifies the financial implications of equity accumulation for low- and moderate-income (LMI) borrowers. The analysis examines (1) whether the accumulation of equity crowds out other investments, and (2) whether equity is substantially extracted from net worth through other borrowing activities. The data come from a unique panel study of Community Reinvestment Act (CRA) borrowers and matched renters. A copula modeling approach estimates the distribution of a financial portfolio; the distribution is used to simulate the hypothetical effect of equity accumulation on the portfolios of the matched renters. The analysis reveals no evidence that equity accumulation crowds out other investment activities, nor do we find excessive borrowing against equity by CRA beneficiaries. http://www.ccc.unc.edu/abstracts/1314.Portfolio.Adjustment.7.10.php Thu, 1 Jul 2010 By the end of 2007, thirty states and the District of Columbia had passed some sort of subprime mortgage regulation statute, while the remaining states left the subprime mortgage market unregulated. Were these state mortgage laws effective in restraining risky mortgage lending and mitigating the surge in foreclosures? Our study takes advantage of this natural experiment and compares loan terms, mortgage foreclosures, and defaults in states with and without anti-predatory lending laws ("APLs"), using a sample of 1.2 million mortgage loans originated during the subprime boom and observed monthly through the end of 2008. Using these loan level data, we find that State APLs are associated with a significant reduction in prepayment penalties and appear also to reduce the incidence of option ARM loans. APL's also clearly affected the risk of default and foreclosure: they reduced the likelihood of a loan becoming 90+ days delinquent by 15 percent. These results prove to be remarkably consistent, even after testing for different samples and law specifications. This analysis, combined with other research, suggests that strong state APLs are an important tool for consumer protection and that state APLs should not be overridden by federal preemption. http://www.ccc.unc.edu/abstracts/1316.Impact.State.AntiPred.Lend.6.2010.php Tue, 1 Jun 2010 In our country, a post-secondary degree is key to leading people out of poverty. But what if paying for the degree means graduating with onerous debt and a poor credit rating? Fifty-five percent of African Americans who take on a student loan graduate with an unmanageable debt burden1, a rate nearly twice that of white graduates. Add to that credit card debt, which more than one in five college students report taking on for educational expenses. And ask, what is this post-secondary degree really worth, particularly to a student of color coming from a family with limited assets and income? The social and economic costs of student debt coupled with damaged credit scores only exacerbate the country’s racial wealth gap. Intervening at the college level, however, holds particular potential to transform an individual’s lifetime financial prospects. http://www.ccc.unc.edu/documents/REAP.Final.12.09.pdf Tue, 1 Dec 2009 The Community Reinvestment Association of North Carolina, a community- based advocacy organization, is pioneering a creative use of media to communicate social messages. From the vantage point of Peter Skillern, CRA-NC’s executive director, the recent revolution in communication technologies creates new opportunities for small organizations to communicate their messages broadly, including financial- education messages. Nuestro Barrio, CRA-NC’s most recent project, is a case in point. http://www.bos.frb.org/commdev/c&b/2009/fall/Spader_Unbanked.pdf Tue, 1 Sep 2009 The role of capital in promoting growth is more apparent than ever as communities across the country struggle to bolster sagging economies and stem job losses brought on by the credit crunch. Although it may seem now that all markets are undercapitalized, some areas are chronically undercapitalized, including inner-city urban markets, rural markets, low-income communities, and enterprises owned by minorities and women or serving undervalued customer bases. Their struggle for capital means a struggle to thrive, and for owners, entrepreneurs, employees, customers, and communities, whether they will have a chance to reap the benefits of economic opportunity. http://www.frbsf.org/publications/community/review/vol5_issue2/hagerman_ratcliffe.pdf Tue, 1 Sep 2009 CDFIs provide a range of financing products to low income and minority borrowers with mortgage lending making up approximately one-fourth of all of this activity. In this capacity, CDFIs play an important role in promoting homeownership opportunities for borrowers and communities that have been historically denied access to mainstream sources of credit and that have increasingly been targeted by high-priced or predatory loans. The CDFI Common Data Project (CDP) estimates CDFIs originated 15,109 mortgages in 2005. However, little is known about how CDFI home loans fit within the greater landscape of mortgage finance. We undertook this analysis to attain a fuller understanding of how CDFIs fit within the mortgage market in general. http://www.ccc.unc.edu/abstracts/1008_Role.php Fri, 17 Oct 2008