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 LA JOLLA, Calif., Aug. 23 /PRNewswire/ -- American Residential Mortgage Corp., a leading national home mortgage lender based in San Diego, is underscoring its commitment to fair lending practices with the opening of a new branch in the area's inner city. The office, located at 4111 Home Ave., is the first of seven branches American Residential has planned for minority communities across the country, and is the first mortgage bank branch opened to date in San Diego's inner city.
 The branch has been set up as a complete community-based operation, and will recruit its staff of approximately 10 from within the inner city. In addition the branch will conduct seminars on home ownership and participate in joint programs with community organizations to promote home buying, and will offer the "Community Partners" loan, which features a low down payment.
 "American Residential is pleased to take a leading role in assuring that all of San Diego' residents -- including our minority applicants -- can fulfill the dream of home ownership," John Robbins, chief executive officer of American Residential, said at the opening ceremony. As the funding resource that turns that dream into reality for thousands across the country, we recognize our responsibility to those who need additional guidance throughout the complicated process of applying for a mortgage. The Home Avenue office will offer the education, and our loan officers will give the extra time and special attention that research shows many minority applicants require."
 The company plans to open similar offices in Oakland, Calif.; Philadelphia; and Denver. Opening these branches is part of the company's Fair Lending Initiative which is being headed by Edward Owens III, a corporate vice president. Owens joined the company from Fannie Mae in May and has legal training as well as a broad experience in affordable housing.
 The Community Partners Program
 Along with the company's 40 loan programs, all inner-city branches will feature a new FNMA (Federal National Mortgage Association) loan tailored to lower-income applicants. Underwriting guidelines for the loan remove the major stumbling block for most first-time buyers -- a large cash down payment. Called the Community Partners Program, the loan requires that only 3 percent of the cost of the home come from the borrower's own funds as a down payment. The remaining 2 percent can be contributed by American Residential in exchange for an increase of .50 percent in interest rate. The .50 percent increase in interest rate also includes American Residential reducing homeowners closing costs by .25 percent.
 In another departure from conventional guidelines, no cash reserves are necessary, and closing costs may be funded by a gift from a family member, a grant or a second lien under certain circumstances.
 To qualify for this loan, the combined family income must be at or below 100 percent of the area's median income. In the case of San Diego, this is approximately $44,600.
 "The Community Partners Program loan removes the major financial obstacles to home ownership," Robbins said. "We intend to aggressively market the program in the inner-city because we believe it's the key to first-time home ownership for many who believe they've been locked out of the market by their financial circumstances."
 Robbins noted that lower income consumers mistakenly underestimate their ability to afford a home. "A family may easily handle a $420 monthly rent payment," he said, "without realizing that a $50,000 mortgage can cost approximately $400 a month."
 All American Residential inner-city branches will conduct extensive education seminars to teach community residents about affordability and mortgage financing.
 A Conventional Loan
 The Community Partners Program is a conventional -- that is, non- government insured loan that matches the eased down payment requirements of FHA government loans. Under the Community Partners Program, however, applicants can omit the cost of child care as a monthly cost, to enhance their monthly cash flow and improve their chances of qualifying for the loan. American Residential is one of approximately 30 lenders across the country approved to offer this loan.
 Market Potential
 "American Residential is aggressively pursuing the minority community because we believe it's good business," Robbins said at the grand opening ceremony. "The Mortgage Banking Association projects that 40 percent of all loan originations in the next decade will come from minority borrowers. Until now there has been little attempt to specifically market to these borrowers or to create office environments tailored to minority audiences. American Residential wants to be at the forefront of this effort. 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."
 American Residential Mortgage Corp., headquartered in La Jolla, has 64 branches throughout the United States. The company originates, sells and services residential mortgages.
 -0- 8/23/93
 /CONTACT: Kasey Emmel, media relations of American Residential, 619-535-4310/

CO: American Residential Mortgage Corp. ST: California IN: FIN SU:

LM-EH -- SD004 -- 5077 08/23/93 13:16 EDT
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Publication:PR Newswire
Date:Aug 23, 1993

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