Housing Fix: Minority Group Unveils $1.2 Billion Industry-Led Program

The National Association of Real Estate Brokers, Inc. (NAREB) announced the launch of a 25-city, $1.2 billion REO and foreclosure mitigation initiative called the Homeowner’s Assurance Program (HAP).

The program is designed to address the devastating effects of foreclosures on communities across America. HAP is a non-governmental, industry-led solution to the nation’s housing crisis.
NAREB was formed in 1947 by African American real estate professionals and is the oldest minority trade group in the United States. The organization has a vast network of industry professionals including: Realtists, sales agents, appraisers, mortgage brokers, and loan officers as well as practical experts in pre- and post-counseling, loss mitigation, foreclosure, property management, housing construction, and development.
NAREB and its professional network will serve as the “boots on the ground” for HAP, providing the agent infrastructure to manage, market, and dispose of nonperforming loans and REO assets acquired under the program. Targeted buyers include first-time homebuyers and others who are caught in the credit crunch and having trouble purchasing a home.
Private and Wall Street investors are providing the $1.2 billion in initial capital for the program roll-out in 25 markets. HAP’s deployment of capital to purchase, renovate, and sell REO properties will also generate jobs and income for real estate-related small businesses in the targeted markets.
A beta test is already taking place in the Atlanta metropolitan area. The official roll-out of the program in the second quarter of this year will expand HAP to the Los Angeles, Houston, Miami, and Baltimore markets.
“The goal of HAP is to bring back the American Dream to millions of people throughout the nation,” said Julius Cartwright, president of NAREB.
“We’re seeing a wholesale eviction of families, and tens of thousands of vacant and blighted properties in cities that have been historically stable homeownership communities,” Cartwright said. “We have the experience, expertise, and tools to provide a ‘boots on the ground’ effort to identify and screen qualified buyers for these properties, and help sustain or rebuild impacted neighborhoods.”
The program will be spearheaded by a new national nonprofit organization bearing the same name, Homeowner’s Assurance Program LLC. Its board members will include representatives from minority real estate, education, and business communities. The principals of NAREB and SRP Development, one of the private investment companies directly involved in the project, will serve as the managing members of Homeowner’s Assurance Program LLC.
Also part of the initiative are MST Investment Advisory Services and 24 Asset Management Corporation, which have been selected as the platform managers to oversee all asset management activities for HAP, provide capital audit controls, and manage day-to-day operations.
SRP Development, MST Investment Advisory Services, and 24 Asset Management are all minority-owned companies.
HAP will seek to acquire properties from banks as well as government agencies, including HUD, the FDIC, and the government-run GSEs Fannie Mae and Freddie Mac.
“We welcome NAREB’s initiative,” commented Ed Jennings Jr., HUD southeast regional administrator.
HUD’s REOs are initially offered to owner-occupants. Following the priority period for these buyers, listings of unsold properties are opened up to investors.
“We are pleased to hear NAREB’s interest in buying HUD properties that have been on the market for more than four months, and their comprehensive approach of partnering with other entities to get them back into move-in condition,” Jennings said.
He also noted that HAP plans to use HUD-approved counselors to prepare buyers for homeownership.
NAREB announced the launch of HAP on Friday at its 65th Annual Mid-Winter Conference, which kicked off February 21 and runs through February 25.