Preface During the last decade, a number of government and private-sector groups have worked to improve the home-buying process for American households. As access to credit is essential for most buyers, Mortgage Credit Partnership (MCP) have been important part of that process. The Community Affairs Division of the Federal Reserve Bank of St. Louis has compiled a large number of documents regarding the establishment of Mortgage Credit Access Programs. These original documents came from a wide range of organizations and in a variety of formats. The Research Division of the Federal Reserve Bank of St. Louis created the document you are reading from these original source documents so as to make the materials accessible in a common format at a single location on the Internet. This document is composed of several parts. You are reading the main body, a seven megabyte PDF-format file which contains links to seven external files, five external “Attachments” and two external slide presentations. Two of the attachments and the two presentations are links to documents on the Federal Reserve Bank of St. Louis web site; the other three attachments are links to documents on web sites maintained by the Federal Reserve Banks of Cleveland, Boston and Chicago. All attachments are accessible only if you are reading this document on the Federal Reserve Bank of St. Louis web site <www.stls.frb.org>. Otherwise, clicking on these links in Adobe Acrobat will return an error message (either “URL not found” or “Cannot open web server.”) Marianne Becherer St. Louis, MO January 11, 2001 Table of Contents Introduction The Home-Buying Process Puzzle........................................................................................A-1 The Cleveland Project ...........................................................................................................A-1 Scope of this Manual.............................................................................................................A-2 Getting Started Recruit Co-Sponsors .............................................................................................................B-1 Form Leadership Team ......................................................................................................... B-1 Involve Industry Leaders....................................................................................................... B-2 Host CEO Breakfast..............................................................................................................B-2 Checklist................................................................................................................................ B-4 Samples ................................................................................................................................. B-5 Initial Conference Conduct First Conference...................................................................................................... C-1 Distribute Handouts......................................................................................................... C-1 View “True Colors” Video.............................................................................................. C-1 Introduce the 18-Point Decision Tree ............................................................................. C-2 Conduct Breakout Sessions............................................................................................. C-2 Wrap-Up Conference and Recruit Task Forces .............................................................. C-3 Checklist................................................................................................................................ C-4 Samples ................................................................................................................................. C-5 Task Forces Establish Task Forces............................................................................................................D-1 Select Chairpersons and Administrative Support..................................................................D-2 Define Project Manager’s Role.............................................................................................D-2 Prepare Mid-Process Updates ...............................................................................................D-3 Conduct Mid-Process Meeting........................................................................................D-3 Publish Newsletter...........................................................................................................D-3 i Produce Final Task Force Reports ........................................................................................D-3 Publish Project Report...........................................................................................................D-4 Checklist................................................................................................................................D-5 Samples .................................................................................................................................D-6 Action-Planning Conference Present Findings and Recommendations............................................................................... E-1 Determine Appropriate Conference Agenda......................................................................... E-1 Announce Implementation Plans .......................................................................................... E-1 Survey Participants................................................................................................................ E-1 Checklist................................................................................................................................ E-2 Samples ................................................................................................................................. E-3 Implementation Implement Recommendations................................................................................................F-1 Industry Changes..............................................................................................................F-1 Government Changes .......................................................................................................F-1 Trade Association Changes..............................................................................................F-1 Monitor Implementation Progress..........................................................................................F-2 Checklist.................................................................................................................................F-3 Implementation Chart.............................................................................................................F-4 Conclusion Text .......................................................................................................................................G-1 Attachments (Usable only on the Federal Reserve Bank of St. Louis Web site.) Cleveland project newsletter ..................................................................................Attachment 1 Closing the Gap brochure.......................................................................................Attachment 2 Boston newsletter ...................................................................................................Attachment 3 Chicago project report............................................................................................Attachment 4 Cleveland annual report .........................................................................................Attachment 5 ii Introduction The Home-Buying Process Puzzle Since the passage of the landmark Community Reinvestment and Home Mortgage Disclosure acts in the 1970s, Congress has called on financial institutions to identify and meet the credit needs of their local communities, including low- and moderate-income neighborhoods. But even as legislation continues to address discriminatory lending practices, disparities continue to exist. While lenders involved in the home-buying process are reportedly doing whatever they can to assure equal access to credit, such economic problems cannot be solved by financial institutions alone. In fact, some may see the entire home-buying process like a puzzle, containing up to 18 distinct steps—or pieces—that must come together to complete the process successfully. One effort designed to bring those pieces of the puzzle together in a collaborative nature is the Mortgage Credit Partnership (MCP) project, or MCP. The MCP project is an effort by professionals involved in the home-selection and buying process to identify and eliminate potentially discriminatory practices within their own industries. The goal of the MCP project is to ensure equitable opportunity for homeownership for all financially qualified individuals throughout the home-buying process—from first contact with a real estate agent to having an appraisal, obtaining insurance and borrowing for the mortgage. The Cleveland Project In 1993, the Federal Reserve Bank of Cleveland, Ohio Civil Rights Commission, Cuyahoga County Department of Development and the Greater Cleveland Roundtable initiated the Cleveland Residential Housing and Mortgage Credit project that examined, step-by-step, the home-buying process in the Cleveland metropolitan area. The results of the “Cleveland project” were compelling; they gained the attention of