A recent report from Empire Justice Center in Rochester shows low-income neighborhoods with high minority populations have been disproportionately impacted by the mortgage-credit crunch.

"I mean look at the Plymouth Exchange neighborhood, the Upper Falls neighborhood,” Barbara van Kerkhove, Ph.D. said, a researcher and policy analyst with Empire Justice Center.

She compared mortgage lending data from 2006, the start of the foreclosure crisis, to 2008, the most recent publicly available data.

"In neighborhoods where 80 percent or more of residents are residents of color, they’ve really have been devastated by the decline in lending,” van Kerkhove said.

Van Kerkhove said the story was not the same for affluent neighborhoods like Pittsford, Perinton and Mendon.

She said there, lending remained about the same and in some instances increased.

“The banks aren't focused enough on looking at how they can improve their lending in communities of color," van Kerkhove said.

"It makes our jobs a lot tougher," said Frank Cornier, President & CEO of NCS Community Development Corporation.

"We acquire, rehab and sell properties to first time low to moderate income homebuyers. These families generally stay in these properties for 10 years or more," Cornier said.

He said stricter lending guidelines that resulted from the recent recession, like higher credit scores, larger down payments and new appraisal guidelines have made it more difficult for his not-for-profit to buy and sell properties.

"It means that low income families are gonna have a tougher time purchasing or refinancing out of higher toxic mortgages that are costing them more money, and hampering their ability to save money, to accumulate wealth, to barrow against the equity they have in their current home for things again like college starting a business, purchasing an automobile or anything like that," Cornier said.

"Citizens maintained and increased its penetration in most underserved communities," Citizens Bank spokesman Mike Jones said.

Jones said the down economy and less demand resulted in fewer loan officers, but said Citizens Bank plans to ramp up hiring and add an additional six mortgage originators in the Rochester region alone.

In addition to working with banks, empire justice center plans to use its research to inform local representatives and push for policy
change.

“The government said we aren't gonna insure mortgages in these communities that have a high proportion of people of color, so the law needs to now say that," van Kerkhove said.

Empire Justice Center