Hogar Hispano Inc. (HHI) is a not-for-profit 50l(c)(3) corporation founded by the National Council of La Raza in 2004. The goal was to form a flexible entity with the expertise to manage different types of real estate assets, work in partnership with other community based organization to support housing, wealth preservation and creation for both Latino and low income families, as well as partner with NCLR affiliates and other non-profits organizations to develop commercial real estate projects. HHI’s headquarters are located in Washington DC but has operated many of its programs through a field office in Phoenix AZ since 2011. Today, HHI manages REO and Distressed Mortgage activities in 31 U.S. states, with projects concentrated in Arizona, Texas, California, Nevada, Michigan, Maryland, Florida, Ohio, Georgia and Illinois. All of these communities have been the hardest hit by the economic crisis and have high concentrations of underserved Latino families. Additionally, HHI intends to expand its programs and services to Puerto Rico by 2016 in order to provide support to families there who are experiencing extreme economic difficulties.
HHI core competencies mobilized to strengthen Hispanic Communities include; i) acquiring and renovating distressed REO and reselling or leasing the renovated homes to income-qualified families and or individuals and ii) acquiring distressed, low value mortgages and working with the homeowners to modify their loans to insure affordability and preserve the families investment in the home and increase neighborhood stability.
Since 2009, HHI has been developing programs in response to the nation’s housing crisis. Using both public sector funding set aside for the recovery effort and private capital identified by HHI, we have developed a national platform that; i) acquires distressed REO and convert the REO into a housing opportunity for income qualified homebuyers/renters and ii) acquiring low value distressed mortgages to preserve homeownership, preserve the homeowner’s wealth by making the acquired mortgages affordable to the borrower via reinstatement or loan modification and providing a smooth transition from homeownership to rental when necessary. It is a unique non-traditional combination of resources and an operational model that has proven to help communities halt the unwanted decline and deterioration of their local neighborhood by avoiding foreclosure which may lead to vacant blighted properties, a decline in property values by keeping homeowners in place and limiting distressed sales. HHI’s platform is sustainable financially and will continue to be deployed in neighborhoods as broadly as its capital resources allow. This ability to be sustainable is a big factor in HHI’s success with its investors, both private and public.
HHI’s REO program platform is designed to sale or rent properties to low and moderate income families or individuals and to cooperate with local organizations to insure the greatest community impact is achieved. The redevelopment of distressed REO includes renovating vacant properties, demolishing blighted properties, and acquiring vacant land for new single and multi-family housing development. HHI has the ability to provide alternative financing in certain cases for families not able to qualify for a traditional mortgage or we may provide affordable rent-to-own opportunities to qualified occupants in the current targeted markets. We are able to do all of this because we believe in the power of collaboration. We partner with private investors who provide funding needed to reach our housing and rehabilitation goal. That is not all. We also provide advisory services to NCLR affiliates and other non-profits on housing and real estate related issues. We serve as a conduit that leverages the government efforts for recovery and the public sectors desire to invest in viable operations. This is our way of supporting our nation's economic recovery.
Hogar Hispano Inc. provides economic stability for families/individuals by improving homes which in turn improve the communities in which they live in. Our goal is to improve the quality of families/individuals lives by deploying outside resources in to their neighborhoods and protecting assets via foreclosure prevention and by providing education programs such as budget development, homeownership counseling and pre-homeownership education that lead to more informed buyers and smarter homeowners.
Our recent partnership with private capital allowed us to acquire 467 non-performing loans directly from Citi Mortgage. With the support of the NCLR Housing Network (NHN) and its HUD Certified Housing Counselors, Hogar Hispano actively reached out to each homeowner and mainly offered loan modifications that included principal forgiveness, term modifications and no cost reinstatements resulting in a greater than 60% foreclosure prevention outcome.
The statistics reveal the ugly truth of the foreclosure crisis. As many as 10 million families lost their homes to foreclosure. As a result, nearly all of them had to move. According to research, migration patterns set in motion by the foreclosure crisis slowed declines in segregation across metropolitan America between whites and Hispanics by 50 percent. It is also well-documented that minorities were particularly hit hard by foreclosures. But this work, published in the American Sociological Review, suggests that those racial disparities were compounded by what happened next: Minorities who lost their homes moved to more distressed neighborhoods, while white homeowners who could leave appear to have been the first to pull out of places hit hard by foreclosure.
Being underwater varies by region, however more than four-in-ten (41%) Latino homeowners in Northeastern states say their mortgage is “underwater”, a share greater than any other part of the country. By comparison, 32% of Latino homeowners in the West, 27% in the North Central region, and 21% in the South say they owe more on their mortgage than what they could sell their home for. According to a recent survey by Hart Research, 64% of Hispanics have made at least one sacrifice (increased credit debt, stopped saving for retirement, taken a second job, cut back on health care, etc...) in recent years to cover their overall housing costs. Which goes to show the importance the Hispanic community attaches to fueling their housing needs.
Despite being hit hard by the housing market downturn, three-in-four (75%) Latinos agree that buying a home is the best long-term investment a person can make in the U.S. (Pew Social & Demographic Trends, 2011).
Latinos have been more affected by the home foreclosure crisis than other groups. According to a recent study by the Center for Responsible Lending (Gruenstein Bocian, Li, Quercia and Reid, 2011), the rate of completed foreclosures on loans originating between 2004 and 2008 was 11.9% for Latinos. That foreclosure rate was more than double the rate for non-Hispanic whites (5.1%) and higher than the rate for blacks (9.8%).
There were 54 million Hispanics in the United States in 2013, comprising 17.1% of the total U.S. population. The median age of the Hispanic population is 27, which is 10 years less than the median age of the overall U.S. population. In 2012, 62% of Hispanic households were married and 60% of them had children under 18. Hispanics hold 3.3% of national elected offices, though they represent 17% of the population. There are many other disparities in the Hispanic population which impact their ability to purchase a home or to avoid foreclosure.
Hispanics make up more than 17 percent of the U.S. population, but only hold about 2.2 percent of its wealth. The saddest part is that one of the most crucial voting demographic in the U.S. is getting severely short-changed. Part of that is due to the fact that Mexicans and Puerto Ricans make up nearly 75 percent of the country's Hispanic population, but each earn significantly less, on average, than the typical American household. The median household income in the U.S. is roughly $51,400, but it's only $38,000 for Mexican families, and $36,000 for Puerto Rican families.
Hogar Hispano Inc. has made a difference in financially distressed Hispanic communities across the country by providing alternative housing solutions and foreclosure prevention strategies that work and can be replicated anywhere else in the country. From 2011 to now, HHI has acquired 1,120 properties, (REO) created employment opportunities for over 150 people (full and part-time) and infused over $50,000,000 of private capital into various hard-hit communities nationwide. Our goal is to triple these numbers by the end of 2016.
HHI also acquired 467 distressed mortgages to help homeowners avoid foreclosure. We accomplished this primarily by providing owner occupants with principal forgiveness via loan modifications, reinstatement or by supporting strategies that include short sales, cash-for-keys or deed-in-lieu foreclosure. Our goal is to expand these services and acquire no less than 15,000 distressed mortgages by the end of 2015.
HHI has created a unique sustainable platform which can adjusts as the development opportunities arise and or change over time. Using its own capital and capital form private investors HHI can respond quickly to assets that fit HHI’s program guidelines and to opportunities as they become available. The model allows us to contain costs so operations can be sustained over time as the market fluctuates and changes. And most importantly the HHIs’ commitment to work with local and national for- and non-profits to co-develop assets when possible and utilize both national and local housing counselling organizations to ensure the buyer/tenant is fully prepared for any decision they are making with an HHI controlled asset. This is both good for the family and provides HHI the security of knowing that the purchase, rental or modification is affordable over the long term.
The future looks bright for HHI. We forecast that by the end of 2015, we will create homeownership for an additional 100+ families/individuals. Our goal is to generate enough capital to continue to invest in the acquisition of distressed REO in hard-hit markets.
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As a non-profit, the board of directors has authorized its Executive Director (Marcos Morales) to implement the strategic plan it has developed and manage the affairs of the corporation. Our team of professional Asset Managers has been assembled to achieve the highest quality outcomes from the existing programs and grow the business in all Board-approved programs.
Our team manages a network of realtors, contractors, inspectors, for and non-profit partners and other third parties in multiple cities across the country to fulfill our mission statement.