JPMorgan Chase commits $30B to racial equity

JPMorgan Chase announced the addition of $30 billion to its commitments to advance racial equity over the next five years. The $3.2 trillion asset bank pledged to “harness its expertise in business, policy and philanthropy” to generate economic opportunity to the advancement of underserved communities, “especially the Black and Latinx communities.”

Building on the firm’s existing investments, this new commitment will drive an inclusive economic recovery, support employees and break down barriers of systemic racism, the megabank said in a statement, and fight against structural barriers that created profound racial inequalities exacerbated by the COVID-19 pandemic.

“Systemic racism is a tragic part of America’s history,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”

The new commitments include loans, equity and direct funding through several initiatives.

Promote and expand affordable housing (AH) and homeownership

  • Originate an additional $8 billion in mortgages to 40,000 home purchase loans for Black and Latinx households. 
  • Including substantially increasing the Chase Homebuyer Grant in underserved communities and up to $4 billion in refinancing to lower mortgage payments 
  • Finance an additional 100,000 affordable rental units via $14 billion in new loans, equity investments and other efforts to expand AH in underserved communities; including investing additional capital in vital community institutions, AH construction and rehabilitation for low-to-moderate income households nationwide.

Grow Black and Latinx owned businesses

  • Provide an additional $2 billion to fund 15,000 loans to small businesses in majority Black and Latinx communities through a new program for entrepreneurs in historically underserved areas, coaching, technical assistance and capital
  • Spend an additional $750 million with black and Latinx suppliers.

Improve financial health and access to banking

  • Will hire 150 new community managers, open 100 new Community Center branches nationwide, and increase marketing spend in underserved communities, to help one million people open low-cost checking or savings accounts, and continue to reach more under-banked customers. 
  • Invest up to $50 million in capital and deposits in Black and Latinx-led Minority Depository Institutions (MDI) and Community Development Financial Institutions (CDFI). 

Accelerate investment in employees, build a more diverse workforce

  • Continue to build a more equitable and representative workforce; hold executives accountable by incorporating priorities and year end performance evaluations, progress reports and compensation decisions, for members of the Operating Committee
  • Provide financial coaching to U.S. employees.

Another $2 billion in philanthropic capital will drive “an inclusive economic recovery and support Black, Latinx and other underserved communities,” over the next five years, in addition to the current five-year $1.75 billion philanthropic commitment made in 2018, the firm explained.

The megabank also pledged to hold itself accountable by tracking and measuring the impact of these new commitments, and reporting related findings to the senior leadership team, which plans to engage an external, Chase Advisory Panel. “We have a responsibility to intentionally drive economic inclusion for people that have been left behind,” said Brian Lamb, global head of diversity and inclusion, JPMorgan Chase. 

“All Americans deserve equitable access to affordable housing and the physical, emotional and financial security it represents,” said Lisa Rice, CEO of National Fair Housing Alliance. “JPMorgan Chase’s new commitments will help make owning or renting a reality for more Black and Latinx families, whose housing access has been impeded by decades of systemic racism and are now disproportionately affected by the impact of COVID-19. Addressing the affordability crisis, now overlaid with the pandemic, will require many players on many fronts, and these commitments are concrete, meaningful steps in the right direction.”

“This moment requires leaders and their institutions to shake off the husks of complacency and to stand in transformative solidarity,” said Dr. Michael McAfee, president and CEO, PolicyLink. “JPMorgan Chase is beginning the journey to answer this call. Its targeted investments in Black and Brown communities and its leadership advancing public policy ensures all people in America participate in a just society, live in a healthy community of opportunity, and prosper in an equitable economy is the type of creative spark that will usher in America’s renewal.”

Fannie: Housing sentiment continues recovery 

Low interest rates continue to support the housing market boosting customer sentiment. The Fannie Mae Home Purchase Sentiment Index (HPSI), which along with Fannie’s National Housing Survey measure consumer attitudes, was 81.0 in September, increasing 3.5 points month-over-month, and up for the second consecutive month. 

Continuing the rebound from late spring, three of the six HPSI components increased month over month as well, fueled by growing consumer optimism over home-selling conditions, expected home price growth, and labor market improvements.

Nonetheless, the HPSI is 10.5 points lower compared to a year ago and home buying conditions and mortgage rate expectations are a little less optimistic.

“The HPSI has recovered more than half of the early pandemic-period decline, mirroring the strong home purchase activity of the past few months,” said Doug Duncan, senior vice president and chief economist. “Consumers’ home price expectations were up strongly this month, with high home prices playing an increasingly, though unsurprisingly, important role in driving both the increase in ‘good time to sell’ sentiment and the decline in ‘good time to buy’ sentiment.” 

The survey shows the percentage of respondents who say it is a good time to buy a home decreased from 59%, to 54%, while the number of those who think the opposite increased from 35% to 38%. 

Similarly, more people said it is a good time to sell, up from 48% to 56%, increasing the net share of those who are optimistic about selling by 14 percentage points. 

The net share of Americans who expect home prices will go up in the next 12 months also increased, up 17 percentage points in September, while expectations to see rates go down fell 11 percentage points.

Some job security concerns have eased off as the net share of Americans who say they are not concerned about losing their job in the next 12 months rose 11 percentage points.

As to household income, the percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased 1%, while the rate of those who say income is significantly lower increased 1%, and 59% say it remained the same.

Going forward, Duncan said, the wild card is how the number of sellers entering the market compares to buying demand, because the home purchase market “requires the proper mix of home price growth and continued economic recovery to achieve sustainable levels of housing activity.”

Realogy completes sale of Property Frameworks 

Realogy Brokerage Group, the nation’s largest residential real estate brokerage company by sales volume, completed the sale of its residential property management company Property Frameworks to HomeRiver Group. 

HomeRiver specializes in single-family and small multifamily properties and “will continue to offer property management and related services” to the clients of Realogy Brokerage Group affiliated agents, the company said.

Realogy did not disclose the financial terms of the transaction.  

According to a recent statement however, Realogy said the acquisition creates the largest third-party property management company of its type in the United States, with approximately 25,000 homes under management.

The collaboration expands HomRiver’s operations – and by default the service market areas for Realogy Brokerage Group affiliated agents – from the current 14 to 22 states.

“The sale of Property Frameworks is a strategic move that allows us to further strengthen and hone the value proposition of our owned brokerage operations,” said M. Ryan Gorman, president and CEO of Realogy Brokerage Group. “This transaction allows us to both simplify our core business and continue delivering high-quality services to the affiliated agents of Realogy Brokerage Group.”

Realogy Brokerage Group, which operates nearly 680 offices with over 51,800 independent sales agents, under the Coldwell Banker, Corcoran, and Sotheby’s International Realty brand names – is a subsidiary of Realogy Holdings Corp., an integrated company that includes title and settlement businesses and a mortgage joint venture.  

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