LOS ANGELES - California's low-income and minority populations will be disproportionately affected by a new condominium earthquake insurance requirement planned by the Federal Home Loan Mortgage Corp., or Freddie Mac, according to a Realtors' analysis.
The study by the California Association of Realtors found that nearly one-third of the state's minority populations live in zip codes designated "high-risk" under Freddie Mac's plan. That was more than three times the number of minorities who live in "low-risk" zip codes, which would be unaffected.
Freddie Mac's insurance requirement applies only to condominiums in high-risk zones.
"These statistics confirm our worst fears - showing in detail that hundreds of thousands of Californians stand to be affected by Freddie Mac's unfair condominium earthquake insurance requirement," said Ed Albers, the association's president.
In a talk at a Mortgage Bankers Association conference in New York last week, Leland Brendsel, chairman of Freddie Mac, defended the requirement as a matter of prudent risk control that was based on its loss experience in the state's last earthquake.