Many lenders that are doing outreach programs for low-income lending are working through realty agents or mortgage brokers, says Michael Boland, executive vice president of Headlands Mortgage Co., Larkspur, Calif.

But many low-income households don't believe they can afford to buy a home, so they never get to a real estate or loan office, he adds.

He says the techniques of affinity lending can be used effectively to market to people otherwise inaccessible to lenders. "There is a big pool of people that are already being helped by agencies and community groups," he said.

He believes outreach programs through community groups - programs such as those sponsored by Fannie Mae - should be effective over time in bringing in new mortgage customers, but he cautions that patience is required.

"Some percentage of people who come to the counseling sessions are overqualified and come just as a safety measure. Then they go out and get their mortgages," he said.

"But there's another group that will attend training sessions, realize they can't yet qualify, then spend 12 or 18 months bringing themselves up to the requirements," he said. "Then they'll be back to the sessions again, and eventually, they will get a mortgage."

One of Mr. Boland's reservations about working with brokers is that they often realize they can sell minority or low-income loans at a premium for social rather than economic reasons.

Mr. Boland points out that volunteer help from agencies and community groups helps to keep the economics of low-income lending favorable for the lenders. And lenders who do direct lending have the advantage of getting to know their communities better, he says.

Mr. Boland established the mortgage revenue bond department at what eventually became North American Mortgage Corp. and has worked with many municipal organizations in their efforts to develop low- and moderate- income housing. Headlands, established in 1986 as a wholesale lender, services about $5.6 billion in mortgages.

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