First American and Greenlining Announce Comprehensive Plan to Increase Minority Home Ownership
—Multiyear, Multimillion Dollar Commitment Aims to Stimulate Economic Growth and Help Under-served Families Realize the Dream of Homeownership—
October 14, 2003, SANTA ANA, Calif.
The First American Corporation (NYSE:FAF), the nation’s leading diversified provider of business information and related products and services, today announced the creation of a historic initiative designed to substantially expand homeownership opportunities for families in under-served Latino, African-American, Asian/Pacific Islander and low- to moderate-income communities.
Joined today by The Greenlining Institute, a multi-ethnic coalition that promotes homeownership and inner-city economic development, First American announced the 5-year program that will combine innovative products, corporate giving and strategic investment to increase homeownership among the nation’s 100 million minorities, beginning with California’s 20 million minorities.
First American’s five-point comprehensive program will introduce a suite of alternative credit products designed to make grade A mortgage financing available to under-served consumers previously denied access by the traditional credit scoring systems. Combining this with the additional program components, First American will serve as a powerful catalyst to the mortgage lenders, investors, Realtors® and home builders working to close the minority homeownership gap.
“Today, homeownership among white Americans stands at 74 percent, but less than half of America’s minority families are homeowners,” noted Parker S. Kennedy, president of The First American Corporation. “With minorities expected to account for more than 60 percent of first-time home purchases in the U.S. through the next decade, servicing these traditionally under-served markets with new products and programs will position First American at the front of the industry’s growth curve. We recognize that homeownership is the cornerstone of economic stability, and we at First American are committed to ensuring that all Americans have the opportunity to own a home.”
With First American involved in one out of every three real estate transactions in the U.S., the company is well-positioned to work with businesses and organizations across the home buying spectrum to increase minority homeownership. First American’s voluntary initiative—an unprecedented move in the title insurance and settlement services industry—will offer:
Guaranteed, Packaged and Reduced-Cost Settlement Services
Under a special First American program, low-income home seekers will be eligible for a bundled and discounted package of title insurance and related closing services. The program, which will be available in California in early 2004 and eventually nationwide, is intended to help simplify the home buying process and expected to reduce the cost of closing by an average of 25 percent for eligible consumers in California.
Alternative Credit Products
In the second quarter of 2004, First American—the leading provider of credit information to the mortgage lending industry—will introduce alternative credit products designed to expand the availability of A grade mortgage financing for many loan applicants previously considered ineligible by traditional scoring methods. These products could help clear the way for tens of thousands of new homeowners, particularly minorities and recent immigrants.
Effective Jan. 1, 2004, First American will implement a strategic corporate giving plan, directing at least 1 percent of its annual pretax profit toward expanding homeownership opportunities in under-served communities.
First American intends to be the leader in its industry and a leader among Fortune 500 corporations in developing a voluntary community investment program. Beginning in January, First American will create a for-profit investment portfolio that directs a minimum of 10 percent of its net new investment capital into projects that directly impact affordable housing and urban development within minority and low-income communities.
First American is implementing specific goals from the board of directors to all levels of the company to create an employment structure that, within five years, better reflects the population it serves. The company has also committed to increasing supplier diversity, working toward a goal of 25 percent minority-owned business vendors servicing the company within a 5-year timeframe.
“The insurance industry has been at least 20 years behind the banking industry in developing profitable business opportunities with minorities,” said John C. Gamboa, executive director of The Greenlining Institute. “First American should be commended for voluntarily and enthusiastically seizing this golden opportunity to narrow the minority homeownership gap, enhance the economic development of our inner cities and—at the same time—secure a new, profitable revenue stream. We expect that the First American example will soon be replicated by many other Fortune 500-level insurance companies and business information providers.”
“First American is uniquely positioned and fully committed to help close the homeownership gap, but we can’t do it alone,” said Landon V. Taylor, vice president of market development for The First American Corporation. “Many organizations in the real estate, mortgage lending and homebuilding industries are actively pursuing this goal. We are committed to creating the key strategic partnerships that will make this goal a reality.”
Richard C. Hartnack, former president of the California Bankers Association, added: “For 15 years, the banking industry has taken the lead in profitably investing in the inner city. First American’s initiative could be the first of many in the title insurance and settlement services industry that will complement banking investments and produce a major increase in minority homeownership in California, stimulating the overall economic growth of our state.”
For more information on this program, please call First American at (800) 246-3477.
About First American
The First American Corporation, a Fortune 500 company and the nation’s leading diversified provider of business information, supplies businesses and consumers with information resources in connection with the major economic events of people's lives, such as getting a job; renting an apartment; buying a car, house, boat or airplane; securing a mortgage; opening or buying a business; and planning for retirement. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within seven primary business segments including: Title Insurance and Services, Specialty Insurance, Trust and Other Services, Mortgage Information, Property Information, Credit Information and Screening Information. With revenues of $4.70 billion in 2002, First American has nearly 25,000 employees in approximately 1,400 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.
The Greenlining Institute is a 39-member, multiethnic San Francisco-based coalition of consumer, church, civil rights and business organizations that promotes home ownership and inner city economic development. It has reached $900 billion dollars in community reinvestment agreements with a dozen financial institutions, including Merrill Lynch, Bank of America, Washington Mutual and Wells Fargo. For more information, please visit www.greenlining.org.