American Residential Mortgage Corp. has opened the first of several inner-city branches that it is planning as part of a bid to increase its lending to minorities across the country, the company announced.
La Jolla, Calif.-based American Residential said the opening of the branch last Friday in San Diego was the first move in its "fair lending initiative," which is designed to underscore its commitment to minority borrowers. Six other branches are planned.
American Residential is pleased to take a leading role" in helping minorities to own homes," said John Robbins, American Residential's chief executive, at the branch's opening ceremony.
The office has been set up as a completely community-based operation and will recruit its staff of about 10 from the neighborhood it serves.
Mr. Robbins, said the idea was to create an environment in which minorities can feel comfortable.
"We're down there to be part of that community - to participate and be a good citizen, not just to make loans," he said.
Mortgage bankers have increasingly been adopting the philosophy that they can do well by doing good.
Mr. Robbins cited projections by the Mortgage Bankers Association of America that 40% of all loan originations in the next decade will come from minority applicants.
He said that until now, little attempt had been made to market mortgages to minorities or to create lending office environments "tailored to minority audiences."
The office has been operating with a skeleton staff for about a month. It is expected to reach full operating strength before the end of the year, a spokeswoman said.
In addition to lending, the branch will hold seminars on the responsibilities of home ownership. It will cooperate with community organizations to promote homebuying. It will also offer a variety of low- and moderate-income loan products.
Mr. Robbins said American Residential has a responsibility to help inexperienced borrowers navigate the complicated process of buying a home.
"The office will offer the education and our loan officers will give the extra time and special attention that research shows many minority applicants require."
To Offer All Loan Products
"American Residential wants to be at the forefront of this effort," Mr. Robbins said.
"We're confident that we have the education and loan programs, the people and the settings that will welcome minority applicants to the concept of home ownership."
The branch will offer all 40 of American Residential's loan products but will feature the Community Partners program created by the Federal National Mortgage Association.
Community Partners offers loans with a low down payment to inner-city borrowers whose income does not exceed the area's median.
American Residential said it plans to open similar branches soon in Oakland, Calif.; Philadelphia, and Denver. Other offices will follow, the company said.
