For Black History Month, we wanted to discuss some of the changes to the mortgage industry intended to increase diversity among all American homeowners, as well as highlight a few of the African-Americans who helped shape the mortgage industry as we know it today.

The Civil War ended in 1865, and census studies from 1890 and onward showed that homeownership among African-Americans was starting to rise. However, there was a significant gap between percentage of African-American households with homeowners and white households with homeowners. While this gap shrunk over the next 100 years, it did so relatively slowly. The gap narrowed at a more rapid pace from the 1970s through 1990s due in part to federal regulations passed to increase diversity in homeownership.

One of the most game-changing regulations that helped fuel this sharp rise in African-American homeownership was the 1968 Fair Housing Act (FHA), which prohibits discrimination in housing, and was co-authored by African-American State Senator Edward Brooke. FHA is part of the Civil Rights Act of 1968, which was signed into law during the riots that occurred a week after the assassination of Martin Luther King, Jr.

In 2015, President Barack Obama signed into law the Dodd-Frank Act, which includes the Affirmatively Furthering Fair Housing (AFFH) rule. AFFH is designed to strengthen the Fair Housing Act of 1968 by, among other things, requiring municipalities that receive money from the Department of Housing and Urban Development (HUD) to analyze its housing occupancy by categories, including by race, to identify any factors that contribute to prohibitive barriers in housing. The municipality must then formulate a plan to remediate these impediments and submit to HUD for approval. AFFH gives HUD authorization to withhold funds from that community if HUD is not satisfied with their efforts to reduce disparities.

The Dodd-Frank Act also includes provisions that help increase racial diversity in the hiring process for the financial services sector. This diversity in hiring can only serve to strengthen our companies and our industry in the years to come.

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