The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL
RESERVE
BANK
OF
ATLANTA
VOLUME
....,
15,
NUMBER
3,
2005
c::
Cl)
E
C.
0
-
Cl)
>
Cl)
"C
t.)
E
0
c::
0
t.)
Cl)
"C
c::
co
>,
....,
c::
::,
E
E
0
t.)
c::
What to Expect
From Recent
HMDA Changes
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Specialized
Mortgage
Products:
a Game of
Chance?
Mississippi in
the Wake of
Katrina
Hurricane
Recovery in
Florida: What
the 2004 Storms
Taught Us
in community a nd economic de velopment
PA G E
9
Specialized Mortgage Products:
a Game of Chance?
Popul ar mortgage products make it possible
to buy homes with less money up fro nt, but
borrowers should be aware of the risks.
PAGE
12
Mississippi in the Wake of Katrina
Mississipp i is poised for economic rebound in the
wake of Hurri cane Katrina despite widespread
devastation.
PAGE
15
Personal Reflections on the Storm
Hurri cane Katrina brought breakthro ugh s abo ut
the power of communi cation for New Orleans
Regional Comm unity Deve lopment Manager
PA G E
2
Attracting Economic DevelopmentAt What Cost?
The use of tax incentives and other subsidies to lure economic development is
increasingly common, but does it really
work to a state's advantage?
Nancy Montoya.
PAGE
17
Hurricane Recovery in Florida:
What the 2004 Storms Taught Us
Florida's expelience after the hurri canes of 2004 suggests that fW1cling for affordable housing is critical.
PAGE
19
Branch Employees Resilient Through Storm
FEATURES
The New Orleans Branch ensured the safety of its
employees and at the same ti me worked hard to keep
banks up and runn ing.
PA G E
6
What to Expect from Recent Changes
in the Home Mortgage Disclosure Act
ew HMDA reporting requirements are raising
concerns among lenders. This article exp lains the
changes and tells how to prepare for them.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
PAGE
20
Spotlight on the DistrictAlabama and Georgia
Katrina - Aname we won't forget
In 2004, four hwTicanes hit Florida in a single season.
of redeveloping the New
This unprecedented bombardment devastated many o f
Orleans community.
Florida's com munities, especially those along its West
Coast. The hmrica.ne season of 2005 has been even more
At the Feel we have empha-
destructive- the Atlantic's busiest in reco rd ed history
sized issues that are within
according to the National Hw1.icane Center, fo llowed by
om reach, and we ru·c poised
th e season of 1969. I ro ni cally, 1969 was the year when
to shift our focus as oppor-
I-Iun"icane Camill e pounded the Gulf Coas1 foll owing a
tuniti es ari se . We started
track simil ar 10 Katrina's.
by aclclressing the needs of
om stalT and ensLu·ing their
Over the years we have coped with many storms and
safety. We relocated mru1y of om New Orleans employ-
th e prob lems they create in the Six th Federal Reserve
ees to om other facilities and provided them wi1h hous-
District , but it doesn 't seem to get any easier. Peopl e
ing and wor k. We also moved immediately to suppoI1
living in coastal areas may be better prepared for stom1s,
fin anc ial institu tion s by k eeping the produc ts and
but addressing community needs after a natw·al disaster
services we provide flowing seanllessly until ou r New
remains a huge w1clertaking.
Orleans Branch became more fully operati onal.
Rebuilding a devastated comrnu.nity requires a great deal
In the Commurli.ty AlTairs Offi ce, our cw-rent focus is to
of effo rt and cooperation fTom many different organiza-
assist those displaced from their homes by working with
tions, and developing a suitable plan can be qui te a chal-
orgruli.zations that provide jobs, housing, educati on and
l enge. While storm s usually result in simi lar types of
financial assistru1ce. We are serving on task fo rces and
problems, Katrina has brought about a whole new set
Lmclertaki ng special projects with numerous groups in
of difficulties, primruily clue to fru1li.ly displacement. Yes,
A tl anta, Baton Ro uge, B irmingham and other areas
natmal disasters often displace some families from their
t hat experi enced a lar ge surge of evacuees. WC' are
homes for a time, bu t never have we had to deal with
al so ad dressi ng regul ato ry questio ns from fin anc ial
displacement on such a large scale before. Alm os t. an
insti tutio ns through our Banker Round tab IC's and
entire city of several hundred tho usand people was
other mec hanis ms.
forced to evacuate from New Orleans and relocate to
commu nities sp read across the entire nation.
A l ot of un certai nty still exist s about how long thC'
r ebuilding will ta.kc and what the final clC'cisions w ill bC'.
Since floodi ng and not just windstonn was a maj or cause
However, one thi ng is clear: even if 2005 goC's clown in
of dru11age, experts anticipate environmental hazru·cls as
the record books as the busiest hw1icruw season C'ver, it
a r esu lt o f mold and bacteria, making redevel opment
will most be remembered as the year IILmicanC' Katrina
that much more complex.
clevastatccl om Guu· Coast states.
The Atlru1 ta Fed's Commu.nity Affairs Office m1clerstands
the enormous task involved in rebuilding our coas tal
states af'lcr Katrina. We also realize tha1 extensive coordination wi ll be essential to ensure the effectiveness of
the mru1y national, regional and local orgru1iza1ions w ho
Juan C. Sanchez
have cal led us wru1ting to assist in the huge undertaki ng
Community AlTairs Officer
FEDERAL
RESERVE
BANK
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
OF
ATLANTA
one
two
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
VOLUME
15 ,
NUMBER
3
Attracting Economic DevelopmentAt What Cost?
VAST AMOUNTS OF RESOURCES ARE DEDICATED TO ECONOMIC DEVELOPMENT AT
THE LOCAL, STATE AND NATIONAL LEVEL. THE STRATEGIES EMPLOYED TO GENERATE
ECONOMIC GROWTH AND CREATE JOBS VARY, BUT TAX INCENTIVES HAVE EMERGED
AS ONE OF THE MOST POPULAR AND OFTEN DEBATED TOOLS.
Southern states have traditionally relied more heavily
be unavoidable. Devising a comprehensive strategy for
on incentives, which arc often cited as one of the impor-
economic development that incorporates the different
tant factors in the migration of manufacturing jobs from
goals and accommodates trade-offs is challenging.
the No rtheast to the South. As use of tax incentives has
increased, debate has intensified over whether these
incentives are a wise investment of public resources.
Economic development strategies and assistance
ln the past, economic development strategies focused
on programs that impacted the traditional factors of
What is economic development?
production: land, la bor and capital markets. I-lowcvc r,
Economic development is usually defined as eco-
as businesses have become more willing and ablc to
nomic growth that leads to increased job opportunities
move to a wide va ri ety of locations, many statcs and
and wealth generation at the city, state or national level.
citi es have adopted economic development s tratcgics
The public sector has a critical role in economic develop-
that emphasize reducing the cost of conducting busincss.
ment because it can use public resources to reduce risks
Economic development strategies are characteri zcd
and costs that could prohibit private scctor investment
by two approaches: An externally focused approach
and job creation.
generally directs reso urces towards new business
Diffcrent interests and goals must be acc01ru11oclatecl
recruitme nt and relocation incentives. An interna lly
in fanning an economic development program. Business
focused approac h directs resources towards a "grow
leaders are concerned with improving the business
yo ur own" strategy. There is no "one size fits all"
cli mate and economic competitiveness of the region.
approach, and states must develop a strategy Lo meet
Labor leaders want a strategy that leads to more jobs ,
their particular strategic goals and economic nccds.
hi gher wages and more worker training. Community
RegardJess of which approach is emphasized, assistance
leaders think economic development s hould alleviate
should aim to fLX a market failure rather than serve as a
povcrty and reducc incquali ty. Publi c officials want to
s ubstitute for private investment.
scc overall economic grO\-vth in their com munities.
While a ll of thcsc goa ls are important, differe nt
Economic development assistance is generally divided
into two categ01ies. The firs t approach uses the tax code
thcorics exist about the best use of limited public
and offers tax incentives s uch as capital invest mcnt tax
resources. Trade-offs between the different goals may
creclits, jobs tax credits , sales tax credits , property tax
FEDERAL RESERVE BANK OF ATLANTA
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
three
plier effect of lax incentives and indicate the retwn on
invesh11ent exceeds the actual cost of the incentive.
On the other hand, widespread ctiticism of tax incentives exists among economists, policymakers, conu11uni1 y leaders and even somr business leaders. Criti cs
contend that tax in centives arr an ine ffici ent use o f
scarce publi c reso urces, that they do not produce the
same return on investment as other fo rms of direct
public investment.
Critics of tax incentives furthrr claim they dep ri ve
state and local governments of revenue needed to fund
education, infrastructure and 01 her public services.
They point to studies that show spending on education
a nd publ ic in l'rastructure also encourages econo mi c
development and argue that tax incentives force spending cuts in these very areas.
The role of tax incentives in a company's investment
decisions is a lso ho tly contested . Proponents of tax
incentives believe they play a critical role. Critics on
the other hand cite studies that indicate the quality of
abatement and tax increment financing. Tax incentives
the workforce, geographic location and the overall busi-
for economic development werr oner more heavily used
ness climate arr more important than tax incentives in a
in the South and Midwest, but now thry arr ol'frrrd in at
firm 's investment decision.
Ira.st 40 states.
The second category o f develop men t assis tance
provides non-tax in crnt ives, such as inl'rastr uctural
Measuring effectiveness
Assessing the effectiveness of tax incentives is diffi-
in1provrments, subsidized financing, direct cash grants,
cul t for a vaiirty of reasons. First, determining the true
loan guarantees and other forms of business assistance.
cost of tax incentives is challenging because these costs
These may be offered in conj w1ction wit h tax incentives.
,u-r not typically captLU'ed in a state's budget.
Second, there is no consistent method for assessing
Do tax incentives work?
the cost-lo-benefit ratio of tax incentives. For exat11ple,
Thr effectiveness of tax in centives is a co mmon
incentives may encourage the creation of new jobs in atl
drbalr in economic drvrlopment circlrs. Proponents of
arra, but these nrw jobs may create ad ditional pu bli c
incrnti vrs, including many public officials and COIJ)0rate
costs suc h as increased traffic congestion and p ubli c
leaders, say they arr a necessary tool for at tracting busi-
service needs. Often these ad diti onal costs arc not
ness and promoting job creation and retention. They
included in the at1alysis of the incentives.
argue that states or cities that do not o!Trr tax incentives
On the other hand, the cost of incentives may seem
a.re at a competitive disadvantage when attempting to
lo outweigh thr benefits, but there may be other long-
recruit or retain jobs that could migrate to another state
term social benefits associated with the investment
or C0LUltry.
th a t can not br easily measured. A unifo rm cost-
Proponents argue that tax incentives pay for them-
brnrfit analysis that includes in1mrdia.te and long-term
se lves by generating add itional revenue as businesses
costs and ben efi ts as well as the socia l costs a nd
expand and jobs arr crralrd. Supportrrs of this view
benefits s hould be developed to evaluate the effective-
point to several economic studies that show the multi-
ness of incentives.
four
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
VOLUME
15,
NUMBER 3
Third, it is difficult to determine' llw impact o f
bet wren thP state's. The federal govrrn mrnt usually
incrntivrs brca usP it is impossiblr to k no w what
defers to th e states rcg;:u-ding C'c-onomic dPYelopnwnt
might have happrnrcl with out thr in c-r nt ives. For
policy at thr local lrvel, but a recent court decision in
examp lr, it is hard to determine if a colllpany wo uld
Ohio indicates that cou ld be changing.
have locat ed in th r sanw area or c-rratr d tlw sa rnr
In Sep trlllb er 2004, thr U.S. 6t h Circui t Court or
nulllber or j obs Pvrn w ithout incc nt ivrs. In high-
Ap peals de clar ed that part or an in centive packagl'
growth areas w hrre new companies are localing ancl
offered to DaimlPrC'hrysler by thr state or Ohi o was
all companies arr growing, it is particularly difficult to
un const ituti ona l. The business CO illlll Unity and state
isolate lhr illlpac-t or the incentives.
economic den'lopment agencies quickly int rodun'd
Finally, lack of long-te1m monitorin g makl's it di(findl
federal leg islatio n to protect a state 's right to grant
lo measure' t hl' e!Tcctivcncss of inc-rnt ivPs. Cit iPs and
economic- dP\'Plopml'nt incenth·es to pri\·atP coqiora-
states usually roe-us deve lopmen t rcso urc-l's on new
tions. On Sqi tembe r 27, 2005, the U.S. Supn'nH' Cou rt
invest nwnt and job c-rration rathe r th an ongoing supr r-
agr eed to rc•vil'w tlw Gth Circuit decision , causing t he
vision to cnsurl' that corporations follow through on th e
federal lrg islat ion to be delayed.
COilllllit nwnts they made in return fo r the incentives.
To cnsurl' Ill0rc eni c-icnt use of tax inc-ent ivPs, grl'atl'r
transparency ,rnd accountabil ity are essrntial. Disc-losing
What is the future of tax incentives?
the full \'a.Jue' or inc-pnt in's a.11d conducting a cost-lH'ndit
Thr usr of statr ancl local tax in cenli\'PS is c-ll'arly
analysis that inclucks both short- and long-tC'rm costs
controversial. Businesses now almost expc'ct inccnli\·es
and benelits would lc'acl to a more infornwd public- debate
when they airnouncc pla.11s for a new location or expan-
over the use of incl'nli\TS. Making coqmrat ions mon'
sion o r their c·urrent faciliti es.
accountab l<' for thl' in c-C'nt ives they rPc<'iVt' is also
important. More st at rs arc starting to inc-lu dP pl'rformancP standards that tir incentive ofTPrs to cl'rtain
INCENTIVES ARE OFTEN CRITICIZED
job or invest mPnt l>Pnchmarks.
FOR ... DRIVING THE "ECONOMIC RACE
What are the alternatives to tax incentives?
In addit ion to tax incrntivcs, investmrnt in l'ducation
TO THE BOTTOM:'
a.11d workforn' trai ning, promotion of policies to .:lssist
entrepreneurs ;:rnd invpstlllcnt in other forms o f businrss
assistance arP all st r atc,giPs t o spur economic dl'Vl'l-
I lowl'vcr, a broad ra.11ge of groups ;:u·c voicing concern
opmcnt. Sonw states ;:u-p also considering mak ing thC'ir
over the use or incrntives in light or th e tight ri se al sit ua-
tax codrs IllOrP busi ness friend ly m ·erall whilC' n'ducing
tion facing state and local goYernmcnts.
reliaiice on incent i\'C'S.
Incrnli\·es arr ol'trn criti cized for fur ling a bidd ing
An effect i\'l' ('conomic de\·clopmcnt progra111 must
war [)('t wren jurisdictions and dri ving t hr "pcono mic
balance many differe nt interests in light of both short -
r ace to I hr bottom ." T hese critics argue I hat in an
and long-tcrlll goals. It shou ld help the statr impro\'C' all
effort to win the big deals, states and local gove rn -
of the facto rs that create a strong business c-limate: an
ments arr giv ing away their tax base ancl would br
edu catPd workrorcr, good schools, adequate' public-
better off if I hey competed with different C'conorni c
services, good infrastru cture, housing ancl a compl't itivP
de\'elopment stra t egies .
tax syst cm.
♦
Sinn' nearly all states offer incen li\·es, it is \irtually
impossiblr for o np state to end its in c-rn li \'P program
unilatC'rally. Thus tax incentiYe opponrnts ai·c, calling for
T his artic-lP ll"as ll"rittPn by .Jpss ic-a Lp\'ppn Farr. n'gional
COllllllllllity dl'\"l' iOpllll'llt manager in the Atlanta FP(i"s
'.\ash\·illl' Branch.
action at the frdrral level to encl incentive' colllpct ition
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
f i Ve
What to Expect From Recent Changes
in the Home Mortgage Disclosure Act
RECENT CHANGES IN THE REPORTING REQUIREMENTS OF THE HOME
MORTGAGE DISCLOSURE ACT
(HMDA) HAVE SPURRED WIDESPREAD CONCERNS ABOUT THE
PUBLIC AVAILABILITY OF LOAN
PRICING INFORMATION.
Lenders fear that if new loan pricing data suggests
the "IIMDA data collection in order to gather
con-elations between variations in the price of mo1tgage
info rmatio n on rates charged to aid [us] in seeing if, in
loans and a borrower's race, sex or geographic loca-
fact, differences in rates are truly driven by differences
Li on , the informa tion could prompt significant
in risks and costs and not tainted by disc rimi nation. "
regu lato ry oversight, protests from consumer advocacy
groups and class action litigation regarding unlawful
History of HMDA
discriminati on. Bankers are also concerned about
The llome Mortgage Disclosure Act (IIMDA) , orig-
increased regulatory burden for compliance with the
inally enacted by Congress in 1975 and implemented by
new HMDA changes.
U1e Federal Reserve's Regulation C, requires most lending
Banking regulatory agencies agree that the new
institutions at a certain asset level with offi ces in metro-
IIMDA data cannot conclusively support any mean-
politan statistical areas to clisclose publicly available data
ingful allegations of illegal discrimination; rather they
on mortgage applications they received or purchased
be lieve that the data will help to foc us fair lending
during each calendar year. The purpose of IIMDA is to
exam ina tions by identifying which lend ers, products
provide inforn1ation about how well financial institutions
and geographic areas require furthe r scrutin y. In a
are serving the housing credit needs o f neighborhoods
speec h to the Ind ependent Commu nity Bankers of
and com munities in which they operate.
America, F'ed Chairman Alan Greenspan stated th e
Since its enactment Congress has ame nd ed IIMDA
changes in l-IMDA resulted from the Federal Reserve's
several times. The most significant changes were in 1989
intention, in consultation with other agencies, to amend
wh e n Co ngress passed the Financial In s tituti ons
six
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
VOLUME
15, NUMBER 3
Reform, Recovery and Enforcement Ac t (FIRREA),
which expanded HMDA coverage to mortgage lend ers
• Report denials for pre-approval requests. Lenders
also have the opti on to report pre-approvals thal
not affiliated with depository institutions or holding
were granted but not accepted by the consumer.
companies. The amendments also required lenders to
• Identify loans subject to the Home Owners hip and
report the disposition of applications and to collect and
Equity Protection Act (I-IOEPA), which am ended the
report information about the race, sex and income of
Truth in Lending Act and applies to non-pmchasc
appli cants for loans subject to HMDA. It is noteworthy
closed-end home loans with an APR or fees in dollars
that home mortgage lending is the only type of lending
above specified thresholds.
that requires or even permits the gathering of informa-
• Report if a loan or application is for a ma nufac tured home.
tion about race.
The new public data resulting from the 1989 an1encl-
• Characterize loans using the new streamlined defilli-
ments inclicatecl that minorities were denied at signif-
tions of refinancing and home in1provement loan.
icantly higher rates than whites, th us heigh tening
• Report whether a home loan is secured by fLrst lien,
conce rns abo ut fair lending in the mortgage market.
Lenders responded by adopting more specific creclit risk
jW1ior lien or unsecured.
• Obtain and report an applicant's race and ethtlicity
guide lin es to e nsure fair treatme nt and to avoid the
for all applications completed remotely or in person.
Lulintencled consequences of unlawful cliscrinlination in
The 0MB revised standards for race by removing
their mortgage lending. Lenders have also tried to reach
"Hispanic" from the race category and placing it into
minmity borrowers as well as low- and moderate-income
a newly-c reated ethn icity category. App li cants a rc
borTowers and neighborhoods through comrnwlity out-
categorized as one or more of the fi ve racial groups
reach activities.
(American Indian or Alaska Native, Asian, Black or
Recent developments in the ho me mortgage industry
Af1ican Arne1ican, Native Hawai ian or Other Pacific
such as the growing significance of risk-based pricing,
Islander, and Wllite) ancl into whether an applicant's
the expansion of the sub-prime market and increased
ethnicity is "Hispa nic or Latino" or "Not Hispani c
concern about predatory lending have !eel to furt her
or Latino."
changes in HMDA. In aclcl ition, th e Office of Management and Budget (0MB) revised the classification of
• Repmt loans placed in private securitizations.
The various add itions and revisions to Reg ulation C
race and ethnicity, thus necessitating furthe r changes to
are designed to provide s takeh olders with more usefu l
HMDA. In 2002, the Federal Reserve Board annou nced
informatio n to gauge competition, study market trends,
a final rule that amended Regulation C.
identify potential price a nd underwriting disparities
for closer scrutiny, and to provide a better understanding
The recent changes in HMDA
of the higher-priced segment of the mortgage industry.
The most recent changes in HMDA, effective in Jan u-
In addition these I-IMDA changes allow regulators and
ary 2004, expanded coverage to more non-depository
other enforcement agencies to evaluate better an institu-
lenders that are active mortgage lenders. In 2004, HMDA
tion's compliance with anti-discrimination laws, namely,
covered 8,853 lenders. The new changes require I-IMDA
the Equal Credit Opportunity Act (ECOA), the Fair
iilers to:
I-lousing Act (FHA) and other consw11er protection laws.
• Report pricin g inform atio n in the form of a rate
The addi tion of I-IOEPA status will identify the nu m-
spread-the difference between a loan's annual pe1°
ber of HOEPA loans a lender made thus providing reg-
centage rate (APR) and the yield on Treaswy secu-
ulators a nother tool for evaluati ng fair lend ing a nd
rities with comparable maturity. For first-lien loans,
Regul ation Z compliance. The revised defi niti ons of
the rate spread is reported when it is at least 3 per-
refinancing, home improvement, race and etlulicity aim to
ce ntage points, a nd fo r subordinate-lien loans
reduce inconsistencies in the data as well as align them
when the rate spread is at least 5 percentage points.
with changes in 0 MB defillitions. However, changes in
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK OF
ATLANTA
seven
the definitions of race and etlmicity will present a chal-
of reactive, by becoming intimately familiar with their
lenge in comparing 2004 HMDA data to pre-2004 data.
HMDA data and preparing for any consequences that
The reporting requirement that trac ks pre-approval
requests gives exa.111.iners a.11d other stakeholders insight
into the pre-approval stage and therefore provides a
may result from its release.
By undertaking their own analysis of the new HMDA
data as a compliance measure, lenders can prepare to
more complete pictme of the mortgage process. Other
allay any issues that may be raised by protest groups
new data items such as lien status, the identification of
and class action lawyers. Lenders should analyze and
dissect thei r data using both cursory a nd in-depth
analysis to see if potential lending disparities exist
DESPITE THE REGULATORS' JUDG-
with regard to race, ethnicity, sex, income bracket
or neighborhood.
MENT THAT HMDA DATA ALONE
Large mortgage lenders can employ sophisticated
statistical analysis and perform comparative file reviews
ARE INADEQUATE TO DRAW
of similar applicants. Le nders should also understand
the implications of th e c ha nnels they use to obtain
CONCLUSIONS PERTAINING TO
m01tgage applications as well as analyze discretionmy
loan pricing. They should be prepared to explain fully
ILLEGAL DISCRIMINATION,
their business rationale regarding policies on overages,
concessions, commission structure an d broker fees.
NEGATIVE PRESS REPORTS AND
Training and adequate internal controls can forestall
cl.iscrinl.inatory practices. However, it is not enough to
LITIGATION REGARDING PRO-
merely tell employees not to cl.iscrinl.inate.
VOCATIVE LENDING DISPARITIES
Conclusion
MAY NONETHELESS EMERGE.
HMDA data and prepare to provide credible explana-
Lenders should develop a strong understanding of tlleir
tions for any pricing and denial disparities. Community
groups and other stakeholders should, at tl1e Sa.I'lle time,
manufactured homes and loans placed in private securi-
be aware that I-IMDA data cannot support definitive
tizations alJow more precise product differentiation to
conclusions about whether price or denial disparities
ensure homogeneity in HMDA lending a.11alysis.
reflect unlawful discrimination. The new HMDA data
should fulfill the intended purpose as an invaluable tool
How can lenders respond to new HMDA data?
The new HMDA data was first made public on March
for understanding an institution's mortgage lending patterns and tl1ose of the industry as a whole. ♦
31, 2005. In September 2005, the government published
tlle much awaited aggregate HMDA lending data. Despite
This article was written by Assan JaJlow, examiner in the
Sup ervision ,md Regulation divis ion at the Atlanta Fed.
the reg ulators' judgment that HMDA data alo ne are
inadequate to draw conclusions pertaining to illegal
discrimination (because factors pertinent to a borrower's creditworthiness such as credit score, debt-toin come ratio and other risk-based pricing facto rs are
n ot included) , negative press reports a nd litigation
regarding provocative lending disparities may nonetlieless
emerge. Lenders can respond by being proactive instead
eight
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
VOLUME
15,
NUMBER
3
Specialized Mortgage Products:
a Game of Chance?
THOSE RETURNING TO THE HOMEBUYING MARKET AFTER SEVERAL YEARS WILL BE
SURPRISED BY THE BAFFLING ARRAY OF MORTGAGE PRODUCTS. CHOOSING THE
RIGHT MORTGAGE IS NO LONGER AS SIMPLE AS KNOWING THE DIFFERENCE
BETWEEN A CONVENTIONAL AND FHA LOAN OR A FIXED VERSUS ADJUSTABLE RATE.
On th e contrary, speci ali zed products such as th e
"piggyback" an d " in terest-only" m ortgage are be in g
offered to al l segments of the market rrom the firsl-I ime
homebuyer to the more sophistical ed investor.
Many of these produc t s have been d evel oped in
response to the demand from homebuyers for an affordable mortgage th al requires little or no clown payrne nl
on a home purchase. Other features offer m ore flex ibility to accomm odate the l ifestyle changes of ce rt ain
market segments over time. AJthough this inclustly shift
has accounted ror a significant increase in homeownershi p, what potential p itfalls awai t homebuyers? l s I he
fl exibility worth th e 1isk?
Piggyback loans
A piggyback loan is a combinati on of a first and second
mortgage close d at the same time. Often involving
I 00 percent financing, the first mortgage loan can cover
80 pe rcent of th e cos t o f the ho me with a 'piggyback'
second mortgage valued at the remain ing 20 percenl .
The most co mm on type, however, is the 80-10- 10 in
Acco rdin g to a survey by th e Nati onal Association
which the second mortgage product acco w1ts for IO per-
of Realtors , 25 percent of all homebuycrs fin ance-cl
cent of the purc hase- price and the borrower invests LO
100 percent of the purchase p1ice of I heir home. Forty-
p ercent as a clown paym ent on the loan.
two percent of first-li me homebuye rs bought with no
AJthough the sccond mortgage carries a highc r rate
m oney clown.
than the first mortgage and exte nds for a shortcr I crm ,
the advantage of the piggyback mortgage is that t.he
interest eJ...'J)ense is potentialJy tax-cl ccluctible whi le th e
Popular alternative to private mortgage insurance
The populaiity o f I he piggyback loan has been parl ly
mortgage insurance payment (typically r equired fo r
fueled by home buyers who wai1t to avoid private mort-
loans exceeding 80 percent of thc home's value) is not.
gage insurance (PM! ). PM I is circunwentecl by keepi ng
FEDE R AL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
nine
the first mortgage amount at 80 percent or less, and
taking out a second mortgage for the remainder.
Piggyback loans have taken 40 percent of the market
prefer to use the principal po1iion of their paym ent for
more lucrative iJwestments such as the stock market. It
a lso provides fl exib il ity for ind ividua ls with cycl ica l
share fro m private mortgage insurers. According to
income (commissions, for example) who can make
Patri c k Sin ks, exec uti ve vice p reside nt of Mortgage
lower payments during the lean months and repay
Guaranty Insurance Corporation (MG IC), homebuyers
principal when their incomes are higher. Another good
with FICO scores of 770 or higher acco unt for 80 per-
!'it is with yo ung professionals who want to leverage
cent of the lost volume. These bon'Owers are considered
fu lm e income potential for a larger home today.
to be the most desirable market segment.
Morigage insmers are lighting back by pushing to make
Although not a new product, the interest-only mortgage has made a comeback in recent years as mainstream
P 11 tax deductible for fam ilies earning up to $100,000
borrowers try to combat high home prices. Lower inter-
by developing new products, and by w·ging homebuyers
est rates and more innorntive finan cing options have
to compare the advantages and disadvantages of fmanc-
iJ1creased the demand for housing and, in many markets,
ing with a piggyback versus a PMI loan.
driven housing prices up. Consequently, homebuyers are
see king ways to borrow more money witho ut increasing
Mortgage insurers offer new products
In response to the piggyback loan boom, MGIC devel-
their payment or income.
Interest-only loans are especia lly popu lar in markets
oped its SingleFiJe lender-paid mortgage iJ1sLu-ance pro-
wh ere home prices are appreciating fastest, including
duct. Ins tead of the borrower paying PMI, the lender
California, Arizona and Florida. Ilowever, Georgia led
pays the mortgage insurance premitm1, but charges the
the nation in s hare of interest-only loans in 2004 even
borrower for this expense either iJ1 the form of a higher
though home prices did not app reciate as significantl y
interest rate on the mortgage loan , a mortgage orig-
as in other states. More than half of the "pmchase" mort-
ination fee or a combination of both. Wh en the lender
gages in Georgia were interest only, compared with less
charges a higher rate to cover the mortgage insurance
than one-thi rd natio nwide. In Atlanta, 55 p erce nt o f
premium, it is recas t into a tax-ded uctibl e interest
mo rtgages issued in 2004 were interest only.
expense for the borrower.
SingleFi le is cheaper than other mortgage insurance
Th e lure of th e lower payme nt does come with
increased risk for the borrowe r. First, borrowers are
because it is a low-risk product offered to borrowers
gambling that their incomes will rise enough to cover
who have excellent cred it. Eligibility requirements
the future in crease in monthly payments. Second, they
include a 700 credit score or higher and a total debt-to-
are counting on market appreciation rather than debt
in come ratio of 45 percent or less. The discounted
retirement to build equity in thei r homes. Third, they
lender-paid mortgage insurance premium is 40 to 65 per-
,:U'e assw11ing the 1isk of possible hi kes m interest rates
cent less than regular borrower-paid msurance.
after the fixed te1111 expires as well as the potential for
payment shock.
Interest-only loans attract both
wealthy and low-income borrowers
One of the fastest growing adjustable-rate products m
New twist to interest-only option
An interest-on ly option can be attached to both
the last two years is the interest-only mortgage. As the
fi xed-rate and acUusta ble-rate mortgages. Interest-only
name implies, interest-only mo1igages all ow the bor-
ARMs are gaining in popularity, but misperceptions
rower to pay only interest on the mortgage in monthly
a bout this produ ct's features can be costly for unin-
payments for a fixed term of usually five to ten years. At
fo rmed borrowers.
the encl of the fixed period , the loan is fully amortized
over the remaining term of the loan.
One common misu nders tand ing is that the quoted
in terest rate on an interest-on ly ARM is fixed for the
Hi s torically the int erest-only mortgage has been
en tire interest-only period. This is not the case. The
considered a product for savvy, wealthy botTowers who
interest-only pe1iod is the period during which the
ten
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
V O LUME
15,
NUMBER
3
borrower is allowed to pay interest only. An ARM w ith
an interest-on ly option also stipulat es a time limit for
Percentage of New Single-Family Home
th e initia l loan rate.
Interest-Only Mortgages in 2004 by State*
In the case of' ARMs with a ve ry low initial rate, the
•for states with sufficient data
interest-only peri od is always longer than the initial rate
11 •
pe1iocl. For example, an ARM with an interest-only option
for LO years may have ,m initial rate period or six months.
GEORGIA
50.4%
So a live percen t rate today may rise to seven percent in
CALIFORNIA
47.1%
six mont hs. Consequently borrowers shou ld not shop for
COLORADO
45.5%
a mortgage so lely based on the quoted ra te without
NEVADA
44.7%
assessing the overall 1isk of the product.
D.C.
43.8%
ARIZONA
40.3%
A cautionary note
VIRGINIA
40.2%
WASHINGTON
34.6%
This new wave of' real estate business poses risks Lo
two segments of' potential homcbuyers. The first con-
MARYLAND
31.9%
si:;ts of indivi duals who see real estate as a better way
OREGON
31.2%
to accumulate wealth than investing in the stock market.
NATIONAL
31.1%
They sell quickly for capital gain and refina nce to "put
FLORIDA
30.6%
equity to work," thus growing equity through property
SOUTH CAROLINA
30.2%
apprec iation rather than by paying clown th eir loan
MINNESOTA
29.9%
balance. Ilowcvc r, this ta cti c ignores the f'act t hat
NORTH CAROLINA
29.4%
moItgagc amorti za tion is in the homeowner's control
UTAH
26.9%
while app reciation is not. Even the savviest borrower
HAWAII
25.1%
must bear this in mind. If th e val ue of the home docs not
MASSACHUSms
20.8%
appreciate as ant icipatecl, the buyer will be liable to pay
NEW JERSEY
19.8%
the dif'fcrcncc out of pocket.
ALABAMA
18.5%
IDAHO
18.3%
Individuals who want to realize the American dream
of homeownership but have not accumulated the savings
MICHIGAN
17.2%
for a clown paym ent or need a lower payment to qua!U'y
NEW MEXICO
17.0%
f'or a mortgage product are also drawn Lo th ese loans.
OHIO
16.5%
Yow1g professionals who can cow1t on 1ising salaries or
TENNESSEE
16.1%
executives who re ceives annual bonuses may run less
NEW YORK
15.1%
risk than others , but those who utili ze one of these
NEW HAMPSHIRE
14.8%
products to buy a house they cannot otherwise afford
KENTUCKY
14.8%
arc taking a gamble. These loans arc not designed Lo
CONNECTICUT
14.8%
address affordabi lity issues, and thus they can se t up
ILLINOIS
13.9%
homebuyers f'or fa il ure.
PENNSYLVANIA
11.3%
KANSAS
11.3%
TEXAS
11.0%
Although these products may permi t home pmchase
for lilt le or no money down, allow for smaller initial payments or both, they all have costs, and they all have risks.
MISSOURI
9.2%
These products should be used for th eir intended pur-
WISCONSIN
9.0%
poses. ConsLm1crs must shop to sec which if any o f' th ese
LOUISIANA
8.0%
INDIANA
5.8%
loans wi ll work best for them.
♦
This art ic le was writt en by Sibyl Ilowell , regional com munity
de,·C'lop ment manag<'r at the Allanta FC'd.
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK OF
ATLANTA
8011/'/'e: t oa11Pe1for111a11ce
eleven
Mississippi in the Wake of Katrina
HURRICANE KATRINA BATTERED THE MISSISSIPPI GULF COAST. WHATEVER ONE
REMEMBERS IS GONE. ESTIMATES OF KATR INA'S DAMAGE EXCEED $100 BILLION,
MAKING IT THE MOST DEVASTATING STORM ON RECORD. HOWEVER, THE REBUILDING
EFFORT WILL PROBABLY FUEL AN ECONOMIC REBOUND.
In the meantime, the devastation is extensive: the dam-
The billions of dollars required to rebuild the area will
age in Mississippi alone has been estimated at between
generate significant economic activity and may well set
$30 and $50 billion. Two months after the stonn, much
the stage for a complete revitalization of the Mississippi
of the coast remains bwied Lmder a mmmtain of rubble.
Gulf Coast. This is the hope of Governor Haley Barbour
A profo und lack of housing persists and schools are
a nd the newly forme d "Com mission on Recovery,
meeting in tents. Mississippi Power estin1ates that nearly
Rebuilding and Renewal " charged with the task of b1ing-
20,000 of their customers are still unable to take power
ing a renaissance to the coast. If this plan is s uccessful,
because the building is gone or so severely dan1aged that
Hurricane Katrina may act as a catalyst for an economic
restoring power would be dangerous.
boom on the coast and in the state as a whole.
Economic recovery spurred by rebuilding efforts
ing the storm, it is becoming increasingly clear that the
Despite the economk downturn immedfately followLooking at the longer-term economic effects of the
storm, the outlook becomes much more prom is ing.
twe lv e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
decline is likely to be small relative to the growth sparked
by rebuilding. Though the latest employm ent fig ures
VOLUME
15,
NUMBER
3
show a fi ve perc ent dC'clin e in thC' t o t al nu m bN of
people employed in thC' statC', tax collC'ctions excC'C'ded
the pre-Katri na C'slimatC' dwing the two months following
the hw1.icane.
Strong tax coll ecti ons are a result of t he ref ugees
fro m
ew Or leans and the coast dispersed tlu ·oughout
th e state wh o arC' spen di ng mo nC'y for room s, foo d,
clo th es and other items- money tllC'y would no t spend
if Katrina had not occun-ed. Ad ditionally, many people
have already begun to rebuild and that activi ty is also
generating incr eased sales tax. As the rebuilding progr esses, tllC' state can C'X pect to sec a rob ust rebound
of economic activity.
This pirate-themed casino resort on the Mississippi
Gulf Coast (above) was ravaged when Hurricane
Coastal economy key to state's recovery
Central to the economi c rebound will be tl1e revitaliza-
Katrina hit Biloxi. The photo below shows the casino
after the storm.
tion of tllC' Coast, which suffered tllC' worst storm dan1age. The three coastal counties mak e up ro ughly 14
percent o f th e state's economy. T hey rely heavil y on
tourism , w ith 20 percent of the wor kforce dir ec tly or
indirectly involved in the industry.
Since tllC' mid-1990s, ga.rning has bC'en tl1e centerpiece
for coastal towism. Before Katrina 12 casinos operated
on the coast and anotl1er was scheduled to open soon.
All 13 suffC'red significant dam age. Obviously, tllC' closing
of the coastal tourism ind ustry results in a loss to the
state's co fTC'rs. Though the state is losing sales tax from
th e tourism dollars, losses from gaming taxes and fees
obvious solution. But legalization o f gam bling i.n Missis-
are even greater.
sippi has long been controversial. Mississippi has never
Before Katrina th e coastal casinos were gC'nerati ng
cmbra.cC'd tllC' gamblin g industry with open arms. While
rou ghly $8 mi lli on p er mo nth for I.he state through
gambling opponents were fight ing a very pub li c war
gaming fC' C'S and taxes alone. Closure o f th e coas tal
agai nst th e establishment o f a state lottery, bills that
casi nos will cos t th e state most but no t all o ft his
would p erm it dock side gam i ng were quietly making
reven u e. Some ga mb li ng act ivi ty wi ll m ove to th e
UlC'ir way through the legislatw·e.
17 casinos in River County and this will offsC't some of
casinos who initiall y investC'd in thC' state, an ti cipated
the coastal loss.
th e extent of the industry's success.
Casino gambling in Mississippi
bC'tween 1992 and 1994 as U1e state built its casino indus-
o one, incl uding U1e
Mississippi experienced tremendous economic growth
A key component in the Gulf Coast revitalization plan
try. Strong expansion continued tlu·ough the next fe w
has been t o m ove casinos on sh ore to more secure
yea.rs as th e state added more hotels, and bigger, more
fac ilities. Legal obstacles have alr eady been addressed
lmm.rious casinos ca.me into the Mississippi market. The
and at l east two casinos ar e schedul ed to reopC' n by
1990s were by far the most economically prosperous
early in 2006.
period the state has SC'en in recen t decades. Some anti-
For someone not fanli.liar with tlie history of gaming i.n
Mississippi, movi ng the casinos onshor e may SC'em an
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
c ipate that moving the casinos on shore w ill c reate a
similar boom.
thi rt een
However, it is unli kely I hat rebui lding land-based
Orl eans busin esses have relocated to M ississ ippi. For
casinos w ill single-handedly create an economic boom
some the move will bC' tC'mporary, but othC'rs will choose'
for the state. During the 1990s, casinos were being buil t
to remain.
al ong l.h e Mississippi River as well as on l he Coast. In
The economic ou tl ook for Mississippi in th e wakC' of
addition the 1990s enjoyed a strong nati onal economy,
Katrina is cl C'cidedly posi tive. T he state is expected Io
and M ississippi was in part riding thal wave.
outperfo rm th e nation over tlw nC'xt few y<'ars as consl ru ction ac ti vity fu els sl rong expansion.
Coastal economy likely to rebound
The coastal economy is nevertheless poised to prosper
in the co ming years. In facl, land speculators ar·e already
Longe r I C'l'm prosp C'cts are more mixed. While l he
coast's economy is likely to enj oy an economic rena issance, thC' rC'st of tlw sl ate w ill probably return to its
bidding up the pticC' of real estate, and it is possible I hat
long-term growth pa tl ern characterized by prosperous
some residential property w ill give way l o high-dollar
population centers and struggling rural
areas. ♦
condo mini ums. T he casinos are ex pected to re in vest
heavi ly Io make I lw Gulf Coas t an eVC' n more popu lar
T hi s artielC' was wri tl C'n by Darri n Webb , Ph .D., senio r
economi st at the Mississippi lnstitu li ons of lli glwr Learn ing.
desti nati on than be fore the storm, and thi s will bendit
Photo on p. 12 by Mark Wo lfe cou rtesy of FEMA.
the entire state.
Rebu ildi ng efforts in other damaged areas w ill also
contri bute to the sl ate's growth . In ad clili on , some New
Partnership Promotes International Volunteerism
The Office of Volunteers for Prosperity (VfP) at the U.S. Agency for International Development (USAID) and
Operation HOPE, Inc. (HOPE), a leading non-profit organization, have agreed to jointly promote international
volunteer service by American professionals in developing countries.
"Operation HOPE has achieved great success in addressing the economic challenges of under-served minority
communities throughout the United States. Its approach has enabled people to share in the American dream as
homeowners and entrepreneurs," said Jack Hawkins, USAID Director of the Office of Volunteers for Prosperity (VfP). "
"Operation HOPE is excited to be working in partnership with VfP because we share a common goal - the goal of
empowering underserved communities everywhere through economic education and the provision of much needed
knowledge and expertise," said John Bryant, HOPE founder, chairman and CEO.
Among the joint activities of the two organizations will be public relations efforts to promote the new VfP/ Operation
HOPE model for collaboration to support international volunteer service. For more information, please visit
www.operationhope.org or www.volunteersforprosperity.gov.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
OPERATION
HOPE
<~
Volunteers for Prosperity ~
Exptrittza Ch011gi11g the World. /
VOLUME
15,
Personal Reflections on the Storm
Regional Community Development Manager Nancy Montoya in the Atlanta Fed 's
New Orleans branch recounts her experience riding out Hurricane Katrina in her
home for eight days after the storm hit and the levees broke. In this article, Nancy
examines how the events underscore our reliance on technology as well as reveal
the ingenuity of individuals forced to create alternative means of communication
in the midst of a natural disaster.
I han• nC'\'l'r bC'C'n much of a fan of technology. AJ'IC'r
C'XpC'riC'ncing the initial thrill of pC'rsonal colllputNs in
begm1 ancl Wl' hl'm·cl the sound of hC'licoptC'rs fe n ying
people to high ground.
thC' rnsos, I start C'cl to[('('[ that tec hnology i(,c[ to lllOrC'
We waitC'd for tlw National Guard feeling su re they
work, no t k'ss, and had a dehumanizing d'f'C'ct on our
would arrive' in two cl ays , by Tuesday. From tlw nank
lives ancl rel ationshjps. Al l of that chang<'cl aft er Katrin a.
radio ( low l c'chnology, bu t still tec hn ology), WP lwarcl
Tlwre are' now two time' pC'1iods in my life: B.K. (bd'ore
our local leaders' pl C'as for help , and from t lw window
Kat1ina) ancl A. K. (al'ler Kallina). My cfomge in out look
we watched for supplies. They finally appean'd on tlw
bl'gan w ith a simple' tC'lephone call, sonl('lhing W<' take'
following Monday, Seplc'mbcr 5, when we saw bundles
for granted l'W'IY clay.
dropped to the' school across U1e strC'el. I don't know what
we expectl'cl but il cC'rtainly wasn 't cm1s of Slim Fw;;t.
Braving the storm
J\Iy CC'll phorn' ballc'IY lost its charge' on August 21) when
The night bC'fore thC' storm I had an o ld-fashioned
the le\·ees broke. I defaulted to my " ·ork BlackiJPny to
lancl-line com·ersalion with my father in Los Ange les
send e-mai ls to my mm1ager and fami ly. Conse1Ying what
about why I wasn't C'vacuating. I chos<' to hunkl'r clown
littl e baltC'ry I had was important. Three days passed
and ride out t lw storm in my 1903 Victo r ian with food ,
before my nIm1agc'r n'cC'ivC'CI my nwssage mid contacted
water, gas, cash ancl a good friend. I assured him that my
my fami ly. I !e's now on the family Christ mas card list.
house hacl lived th rough on•r 100 yC'ars o f C'nvironnwntal
By F1iclay I figured some order had beC'n reston·d to
assault and that I li\'C'd on some' of the higlwst grmmcl in
tlw neighborhood so I \·C'ntmcd out in wading boots to
New Orleans. AftN tlw final "I lo\'l' you, " I hung up. It
!incl a lm1cl-line phonl'. Tlw ,rnter
\,·as 10 p.m. m1cl th<' po\,·C'r was al ready off.
lugh. One pNson dmrn my street who had tlw only work-
I won't gi\'C' you details about the sto,rn, except to say
th at it lookecl exactly like' it rud on TV. But the TV doesn't
captw·e the sound of U1c wind moanjng m·ouncl t lw house,
\\'aS
no\,. about 1- 1/2 rt
lng phone' in the neighborhood put it out on tlw porch f'or
neighbors to call their loved ones.
After rC'ac hing my mother and hem·ing both her rc'iief'
objC'cls being slm1rnwd against and into the house, and
and angC' r at my stubborn ness in refusing to leave, I
tlw hous<' rock ing baek and forth.
reassmC'd hC'r that I W<t'> fine. In truth, where was I to go·?
On August 28, the morning aftn the Saturd ay night
From what I hc'm·d on tlw radio, the Superclonw and ( 'on-
stonn, I usl'd my cell phone lo let my p,u·ents know that
n'ntion CenlC'r were absolute chaos. J\ ly mother in Los
I was (inc and asked that th ey ca ll e,·eIyonl' elsl'. This
Angeles had lwarcl nC'ws rc'poIts of roaming g,rngs of I hugs
was befon' the IC'vees broke. With thal e,·ent , my whole
shooting at anyone who mo\·ecl in the neigltl>orhoods.
world changl'Cl. Soon the water starl C'd rising, looting
This smvriscd me as \\'C' were safe ancl sound and d1y.
FEDERA L RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
O F ATLANTA
Ii I I e en
Afkr I hLmg up, I went half a block lo the comer where
my frien ds and neighbors were peace full y talking and
sharing supplies. We exchanged info r mation aboul
they would li ke in I he future, ai1cl lhe need for a.fforclable
housing fo r local musicians ai1d aitists.
I cai1't get this kind of infmrnati on anywlw re else; my
where our other friends were, where supplies co uld be
regular lll'ws sourc-es and even our lovl'11 hall meetings
found, and about any clangers
ai·e w1able to provide infonnation this honest, blw1t , bold,
Wl'
needed to be aware
of. It wa-; very low-tpch communication, but very efTec-
canclicl , fort hright, un inhibited or even na:ive. The blog
li\·e. Ahh, the power and simplicity of commurtily. Whal
offers a dcai· ai1cl irreplaceable w indow into tlw hcat·ts
I e>qJeriencecl clicln't match the news re port s of chaos,
ai1cl minds o f our res idents.
violC'nc-c and vandalism.
Finally, after eight clays I was cominc·ed by my manager lo rPlocate lemporatily to tlw Fed's Birmingham
Building a virtual community development network
My rwighborhoocl site was so useful that I began
branch. By now I was holding on to bolh my cE'II phone
thinking aboul how we could buil d a viiiual "conummity
ancl B lackberry li ke they we re IIH' Ilo ly (inti!. 1 had a
development community." Most of the peopl e' that I have
rwwfoun d appreciati on for the beauty o ft heir utility. But
wor ked w ith in the ci ty on comm unity deve lopmen t
it wasn't until I got to Birm i ngham that my respect for
issues arc st il l displaced. Many of them hm·c' lost their
thE' powN of technology ,,·as fully ignited.
own honws, neighborhoods ancl ,,·orkplaces. l\lany of
our housing counselors themseh-es han' no honws.
Reconnecting to a scattered community
Tlwy say that things can be replaced, but not pC'ople.
After LG yc'ars of li v i ng in New Orleans and arclen lly
Before' Katrina about -!69,000 people lin'd in tlw city.
When I left eight days later, only 100,000 remained. The
population C'slimate is now around 75,000 and it appears
loving it-dwrishin g her noble and graceful arc-h i Lecture,
from obsC'rv ing t hC' li cense plaLes that most oft hem arc
cxperiC'nC'ing the exhilaration of riding home clown Bour-
disaster ,rnd rebuilding personnel.
bon Street, marwling at the majC'sty and slwlter of her
When' ,u-e my rPspeclecl peers who know NP\Y Orleans
trees and other mm1C'rous gifts-I finally n'alizC'cl lhal it's
literally from Uw ground up ai1d ha\·e sp0nt lheir li\·es and
the people lhal real ly make New Orleans what she is.
considerable talents building homes and families ,,·it h
The com nnmit ies, l arge ancl small, that c'xisl in her
their ,ision ai1d sweat? They're in Ilouston, Hat on Houge
72 clist incl neighborhoods ai·e the "meal in the po'boy."
and Covington, La., longing to return honw and he lp
This search for my peop le led me to my rH'ig hborhoocl blog, "Marigny/Bywater" on NOLA.C'Ol\l. T here I
rebuild tlw honws and lives that have bc'C'n destroyed.
How can we gather together to shai·e our dreams ,mcl
found my friends who were scattered to tlw winds in
talents, to provide suppoIi for each other, to savor each
places like Houston, Sa,·annah, rural (ieorgia and
otlwr's successes a-; we did B.K.·7 The ai1swer might be
Mississipp i, Austin, Taos at1d Los Angeles.
in technology.
l also fo und new ne ighbors shaiing informatio n on
A \'irtual commun it y could never replacP tlw li,ing,
e\'erything from stnrnclecl pets to minutes from meetings
breathing, joyous and funny community I so lm·e and
,1ith U1e local Cow1cilperson. Tlw blog induded thoughts,
treasure. But it can help us embC'llish an aln'ady rich
concerns, gripes, fears, jokes, information bits and joys
fabric- , pu l l together loose threads, push us to be a
that make' up a ne ighborhood. I discovered a vi rtual
more open ancl democratic society, encou rage more
comm unit y, avai lable ri ght therf' through my finge riips.
open ancl ho nest I hough t and co nversatio n, and g ive
Aft hough I'm now back at honw, I sti ll have my vir tual
us a chance' to part ici pate on a more expa nsive and
community. ll has e,·en become' a part of my work.
inclusin' level than e\·er before. Let's use' this tool lo
Through my neighborhood blog site I c-an monitor the
protect , promote and cherish what really makes Ne,,·
pulse of current issues, such as the housing concerns for
Orleans home: hPr people.
landlords and renters, how insurance c-ompani<'S arC'
hai1clling claims, where people arC' shopping ai1cl senic-0s
s i xteen
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
VOLUME
15 , NUMBER
3
Hurricane Recovery in Florida:
What the 2004 Storms Taught Us
On August 28, 200i), Flolida resiclC'nts C'XJ)C'riC'ncC'cl an
Hunicmw l·1w1cc-s (CatC'gory 2) cai11c- to vi.sit on Sc-p-
unc·omfortablC' mill.1urC' of feelings: onC' was rC'liC'f that a
tember 5, blowing in o,·er the southc-rn encl of I lut chin-
hunicanC' was going to miss us; thC' othC'r, which foUowC'd
son Island and causing $-l.l billion in insurc-d lossc-s a'> it
immC'diatC'ly, was guilt bC'cause \\'C' knC'w othC'rs would
tracked across tlw state.
bC' hit. AftC'r thC' dC'\'astating hunicai1C' SC'ason WC' fac-C'd
Just a fC'w hunicanc-s later Ivan bullied its way through
in 200..J, howC'vC'r, it is perhaps w1derstarnlablC' that WC'
the Panhandlc, lc-aving insw-C'd losses in its wakc- c-sti-
wC'rC' st ill rC'C'ling from t hC' afterrnat h of' a suc·n·ssion of
maLed
disa-,trous stomis.
Weathc-r Channel, we wcrC' all glued to it o ne more tinw
OVC' I'
$4 bi llion. Altho ugh WC'aJ}' of watching thC'
Though WC' arC' only one year into lhC' disa'itC'r rC'covC'ry
on SeptembC'r 2i}, whc-n it was Jeai111c-'s turn: thi s C'at-
procC'ss, what ha\'C' WC' learned about rC'building U1at might
Pgo1y 3 stomi hit Flo1ida only two miles from tlw point
bC' of USC' to our nC'ighbors in Louisiana mid Mississippi•)
where Frann•s made landfall.
Our C'XpC'riC'nC'C' has bC'en that rC'C'O\"C't·y takC's timC',
All in aU , thc- 200..J rlolida hw1icaiw season cl,unagccl
monC'y aiicl P>qJC'rtisC'. It has also bC'C'n important to ha\'C
or dC'stroyecl o\·pr 708,000 housing units and lcf't O\'C'f
a statC'wiclC' afforclablC' housing trnsl in placC' lo mC'C'l lhC'
$21 billion in property damage. Hidden within thosC'
nC'C'<IS o f' vC'ry low- and low-income fai11ilies.
numbers is an incalculable loss of o l der, afford ab le
market-ratC' housing, along with Lhe displacemC'nt of' thc-
Succession of hurricanes in 2004 wreak havoc
Florida ell.7JeriC'nCC'd four major sto1111s in a two-month
Lens of thousands o f' poor households who cal lC'cl that
housing home.
pC'riod in 200..J. On August 13, IlurricanC' Charlie wC'nt
WhilC' tlw suf'f'C'ring in each of tll C'SC' sto rm s was
roaiing across tilC' statC', entering in C'hm·lottC' County as
widC'sprC'ad, thc poorC'st fai1iilies su.fferc-d w1iquC'ly mid
a Category -1 storm and c-xiting through Palm Bc-ach
most Sf'\·c-rc-ly. It was their housing that wa<, IC',L'>I likl'ly
County. lnsurPd lossC'S were estimatc-cl at $G.7 bill ion.
to withstand t hc- prC'ssures of thC' storms. Eldc-rly
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
seventeen
hornC'ownC'rs of'lC'n had no insurance' and fC'w ( or no)
ar c also go ne , an d many local governme nt programs
rC'sou rC'C'S to rebui ld.
have ha.cl to spC'nd $40,000 to $50,000 per unit.
Recovery takes time
Recovery takes expertise
Famil iC's who have had Lh ei r home's clam agC'd or
F lori da's housing I ru st fund has C'qu ippC'cl C'vc ry
ciC'stroyC'cl by a hurricane u nderstan dably want them
co unty- bo th urban and rural -wiLh t hC' capac iLy t o
r epai red as quickly as possible' so that l ife can re turn
accept and p rocess appli ca tion s for rC' habilitatio n
t o normal. Unfo rt unately, w h i le hurricanes do th eir
and purchase ass istan ce programs. So m C' coun ti es
damage in a matter of hours, rebuildi ng tak C's months,
actually impl C'me nt th ese p rograms, and o th ers also
and SOlll C'I imC'S years.
f un d rC'nt al ci C'vC' lop m C' nt.
Our housing markC't, for C'xamp lC', proclucC's a C'C' ttain
Th C' stat C' also has a very we ll-d eve lopC'd techn ical
amou nt of building material ea.eh year on the basis of
assisLancC' dC' l ivery system thro ugh t he "Affordab le
historica l ciC'm ancl. When maj or hurrica rw s damaged
Housing Catalys t," w hi ch is fu nckcl by Llw Florida
hunclrC' cl s of thousands of uniLs, the proclu cC'l"s could
I-lousing Fi nance' Co rporation and imp lC'nwntecl by Lh e
not ilip a swiLch to in stantly meC't thC' hugely increased
Fl orida I lousing Coalition (Coaliti on). A portion o f th e
clemancl for building materials. As a rC'su lt, homeown ers
state's housing trusL fund al so supports th C' program.
had to wait.
Bu ild ers also hi t limits to th eir capac it y. A sudd en
Th e Coal ii ion 's technical assi stan ce i nclud es workshops and on-sitC', one-on-one tr aining as wC'll as deal-
inerC'asC' in demand does not all ow adequate' Lime to add
sp ecific inst ru ction. T he wo rks hops p rC' SC'nt a co re
thC' ski!IC'cl labor needed to increase' producLion. Effmts
curriculum for those new to the afforclab lC' hous i ng
Lo speC'd up t hC' rebuildin g by I a king short cuts in the
field and proviclC' an advanced cmriculw11 for I hosC' wi th
cl evclopnwnt process often result in communities over-
more C'xpC'ri C'nC'C'.
paying for substandard work.
Sin ce I he CoaliLi on 's staff incl ud es housing professionals w it h a training background , t hey ar C' ab lC' to
Higher construction prices ratchet
up subsidies for affordable housing
Accordi ng to dC'velopers working throughout the state,
qui ckly cl evC'l op and present effective trai ning on th e
rule's of thC' nC'w hurricane program as wC' II as provi de
informatio n on how local governm ents shoul d des ign
constru ct ion price's skyrock eted aftC'r I he storms, and as
th eir programs ancl strategies to best mC'el l.hC' nC'ecls of
of NovC'mbcr 2005 th ey had yC'L Lo fal l. BC'lwC'en spring
hurri cane' victims. In addition to th C'sC' workshops, Lhe
2004 and fall 2005, th e cos t of const ruct ion in Florida's
staff has co nLinuC'd lo offer one-on-onC' assistance' as
panhancl lC' rose from $65 per square' fool to $95 p er
local governm ents implem en t their recovery strategies.
square' foot. In southwest Flori da the p rices rose from
RegrC'ttably, there is no way to rebuild a commu.njty as
$90 per square' foo t to $125 per squar e' fo ot. Soul beast
fast as a hurri cane destroys it. I-lowevC'r, eommuniLies
Florida saw similar increases, w ith pric-C's rising from
can r eb ui l d w ith time, m oney and expertise. Florida's
$95 to $130 pC'r squar e foot.
expC'riC'nCC' shows that a dedicated revC'nuC' source for
NeC'd lC'ss to say, during this time income's did not rise
affor dable housing and an established infrast.rncture for
at th C' samC' rate. As a resulL, th C' assistan ce' rC'quired to
spending thC' funds can be valuable componC'nts o f
subsiclizC' housing has risen dramat ieally compared to
hurricane' recovery efforts.
♦
pre-storm a.m ounts.
Local govC'rnment purchase-assistanc-C' program s that
This arl ic l0 was wriltcn by Stan Fill erm an , SC' nior l0chnical
advisor al l hc Florida I-l ousing Coali ti on.
helpC'cl low-income fanulies ,vith subsidies of $15, 000 to
$20,000 bC'fore Lhe storn1 a.re now fin ding I hat it takC's
cl osC' r to $ 100 ,000 to assi st famil iC's C'arning simi l ar
income's. Th C' clays of rehabilitating a llomC' for $25,000
eightee n
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
V O L UM E
15,
NU M BER
3
Branch Employees Resilient Through Storm
/11 the aJfrr-
N1?1c Orleans branch goi11gJoncanl esJ)ffially as it
Katl'i11a. you u 11?1·eJ'r1ce<I
1·rla trs lo <·0111m1111if,1J (/I/cl economic de11elopment i11iti -
wit li l h <' claunling task
a lit •es a11<1 rebuilcli11g i11 Ih a/ 1·egio11 i11 the.fi1 t ure ?
of lw1 ing lo take ca re
1
sqfc,ty
qf' Bmnch
/ 11 your ci1?11\ tl'lwt is the i111J)ortw1ce of !lie
math of Hurl'ica11e
c~f'
I th ink it is cxtrcnwly impo1i,rnt. Wc arc up ancl
continuing bank opem-
running now. We han' rcstorccl cash 0Iwrations for paying
lio11s ll'hile e11sul'i11g th e
an cl receivi ng f1.mctions totally. We arc feeling pretty goocl
about tlw f'uture of tlw opcrati ons in GL<;h in Ncw Orlcai 1s.
e111plo.1Jees. How di d you bal ance
That wc were able to gct up and running that quickly is
those prioriti es?
The stoIrn was .. bigger aiicl stronger tha.11 any-
certainly a symbol to thc city, to all of Louisiana and to
thing ,vp'cl seen in :30 or .JO years; it was pretty clcai· that
the banks. And the fact that we arc going to be tlwre
thi s time we wo ulcl have to tilt the scales in favo r of'
aiicl our pn'sencP is go ing to be known wi ll makc otlw rs
employce safety. Tlwre was no cloulJt about Uiat. Onn'
consider coming bac k to the city.
Wl'
secured the faci lity, a!J of om p1iorities were centered on
taking care of thc employces and making sure that they
were safe and out of harm's way. In cve1y case, we did
t' tT
in favo r of safety for th e emp loyees.
As a nali1'<' Louis ianan. !'111 sure you hm·e
see11 11w11y storms u11d lwrrican es i11 lite area. Do ./JO U
!hi 11k th at I lu l'l'ica 1ie Kat ri 110 wi ll weoke11 th e 1r.,ol oe
of residents to 1cm1t to r ebu ilcf?
Obl'iously. right C{/'lel' the s/01111, 1cillwut elffI l"icity. lhffe 11•as 11 0 access to ATMs. What 1cas the
i111111edi at e impact 011 cash jollow i 11g the h urricr111e?
There wa<; a hugc demancl for cash, ai1d it wwm't
I think that Katrina has temporarily shaken tlw
con fidence of a number of our citizens. It certainly ha<;
ha.cl a.ii effect upon the business commun ity. I think it Im-;
even hacl an effect on the sta unchest politicians. I clo
e,·en a<; lm-ge as it ('Oulcl ha\'e been. Tiie ,u-ea ,,·as so cle,·clS-
think that the resoln' " ·ill return .... Tlw more I see this
tat eel that sornc of' the bai1ks coulcln't e\'en open up in
situation <',·oh·e, llw more I he,u· people sayi.ng that tlwy
temporcuy locati ons. Maiiy of their employees relocat('(l
have clec iclccl to come back aiicl rebu ild. The compai1ies
out or the state. Tlw banks with lo('at ions in Lhe m·ea':i that
th at i n it ially said th at they weren't co ming back haV<'
wcre most cle,·astatecl \\'ere totally inaccessible or they
changed their minds. And I think that with the help of'
\\·ere uncle1-water. Those banks in ai·eas on the pe1iphe1y
e,·eIyone i1woh·ed ai1d ,,ith the constru('tion o!'a wholly
oftllc destn1ction had a huge clcmai1d f'or cash. Evcn some
ncw ('Onc·t'pt in levees . .. tha t we will be fine. I really clo
of those banks lost electricity ai1cl had to set up ten ts out-
thin k that we can come back. And hopefully you'll c-onH'
side of their omces. They were worki ng off records that
back to a better Ncw Orleai1s .. ., one th at is more
had becn pre,iously nm se,·eral days before that showed
economically ,iablc cmcl one that has a better lifcstylc
checking accow1t balances, and they were a!Jowi.ng nlSh
fo r all of its ci tizens.
♦
lo be givcn out to those people presenting checks. I spent
a few clays in my hometown of Thi bodeaLLx, La., ai1 cl for
two or th ree weeks the grocery stores there were only
accept i ng local checks or cash. Creel it car ds, deb it o r
AT I cards were not acceptable. So it did turn into a
UL<;h society in many m·eas for about t Iu·ee or fom weeks.
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
Nott': !\!any Pmployrss at tlw NPw Or lpans branch lost or
suffered damage to their homes. Soon af'trr the hur ricanC' , all
176 Nl'w Orl <'ans Branch prnployrrs rrturtH'd to ,,·ork-('ith<'r
in Nl'"' Or!Pans or C'ISP\\'hl'r<' in lh C' District or System. As of
m id-DP<·PmhPr, 95 Np,,· OrlC'ans staff ar<' back working at t lu•
bra n('h.
l nll' IYiP\\' was conduct Pd by .knnifer Gri(' r. (·ommunily affairs
proj pc·t managPr at thl' Atlanta Frei.
nine t een
SPOTLIGHT ON THE DISTRICT
ALABAMA
BAYOU LA BATRE RECOVERS FROM KATRINA
Tlw nood wat0rs have
reced0d, tlw phon0 li1ws ar0 ,rnrking and all power has been 1-c·stored:
t h0 city of l\l obilt', Ala., brc>a t IH's a sigh of rPliPf. 1any
r0sort city. But now th0 city's plans focus on littl0 mo r0
than r00stablishing basic serviC'('S that will allow for
0n·ntual r0construc-t ion.
Ac-cord ing to the Covernor's offic-0, d,rniag0 from I lurri-
r0aliz0 how fort unat0 they ar(' wh0n th0y S('(' t h0 d0vas-
cane Katrina totait'ci o,·0r $166 mi llion just in Alabama.
talion only a few mil 0s away. TIH' small commun ity of
Along w ith Mobiit' Co unty, ni1w othPr w0st0rn A laba ma
Bayou La Batre, just west of l\ l ohil0, was not so lucky.
counti0s hav0 been designated
\\'it ha population of about :l,-">00, th0 coasta l city
,L'i
disaster ar0as eligibl0
for incli,·iclua.l and public assistai1c-e. DespilC' major fimrn-
hacl em0rg0cl as a commerc ial seafood industry giant.
c- ial loss, only two p0ople died as a r0sult of th0 hurri-
Ac-c-ording to tlw local Charnlwr of Comme1n>, its port
cane, both in an automobile accident during tlw storm .
ac'C'ommoclatecl m ·c>r :300 major ,·esse ls that fished th0
A-; of Nm·ember :2006, the Feckral EnlC'rgency lai1ag0-
Culf wal0rs from th C' Florida Keys to M0xic-o, r0aping
ment Agency (FEMA) repo1ied :27,000 appli cations from
som0 o ft h0 b0st shrimp, oyslPrs, crabs and fin fi sh in
0vac·uees who ha.VP co me to Alabama fro m oth0r stat0s.
IIH' world. Bayou La Batre was common ly refenwl to
The most significa nt n0ed is mon<':V for basic- li,·ing
tllC' "S0afood Capitol of Alabama," and its c•c-onomic
0xpc'nsPs. Outside of FEl\lA and tllC' R0d Cross, thC'
c-ont1ibution to the state ''"as Psi imat0d at $HO to $100 mil-
Go,·pmor's EnlC'rgenc·y Relief Fund has raised $:L~ mil-
,L'i
lion a year.
lion. Oth0 r organizations ar0 playing a major funding
ro l0 as wC'll, such as thC' Cnitc>d \Vay, trad0 groups and
fa il h-bas0d organ izat ions, many of wh ich c-ollaborat0
with state ai1d local govpmments.
Suc-c-Pss ful d0velop mC'nt-and 1w lPv0!opm0nt-a.lways
comes clown to succc•ssfu..l part1ll'rships. Alabai11a Enll'rg0nc·y l\hrnagem0nt Ag0ncy and till' (;o,·0111or's Offic-C' of
Faith-Ba.s0cl & Comnnmity Initiati,·ps ha,·0 b0C'n working
jointly to address t Ill' neC'ds of both hurric-a.n0 v ict ims
The powPrful winds of Ilurri c-ane Katrina litC'rarily
ai1d ernc-u0es. And t lw Fed con t inu0s to b0 at tllC' table.
tor0 this small community to shreds, shutting clown an
\'olunteer organizations that pro,id0 disaster response'
important sourc-P of food and n·,·c•nu0 fort he stall'. As
ai·p dPveloping strongPr ties "ith one ,mother ai1d with
you trav0I along th0 c-oa.stli.Jw, you SC'<' lit 0rally hu ndrC'CIS
financial instituti ons. Loe-al long-tprm 1w·overy
of fishing v0ssC'ls either totally destroy0d or tossPd inland
committ ees ar0 also bui lding strong collaborative rel a-
by nood wat0rs. The storm also rm·aged countless mun-
tion ships on th0 coun ty lewl to work strategic-ally with
bPrs of comnwrcial buildings, c-ommc>rcial equipnwnt
all pmtners in addressing needs.
♦
and hom0s.
In recC'nt yPa1-s Bayou La Bat re's popul aiity ,L'i a site
This artic-il' was wrilll'll by l\1ichal' l ~lilnl'r, c·omn1tlllily dl'H'iopnH' nl dirPc-tor in tlw ,\tlanta fpcl's 13irmingham Hranc-h .
for n1c-ation home's ,,·as on tlw 1is0, and p1in1lt' im·estors had plai1s to c•xp,rnd this cornmunity's potential as a
twenty
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Photo hy \lanin :'\aurnan courtesy of F[\L\.
VOLUME
15,
NUMBER
3
GEORGIA
AGENCIES UNITE IN KATRINA RELIEF EFFORTS
Georgia has
bC'come t lw tem porruy honw to tens of
thousands of llurricane Kat1ina evacuee's. Eru·liC'r repo r1 s
Katrina by organizing threP C'fforts to assist displac-Pd
incl i\·icluals and families.
Fi rst, Il onll'Aicl A t Ian ta host eel an C'mC'rgency drive' to
co ll C'ct itC' ms for infants in rC'sponse to requC's ts from
indicatPd that :25,000 to 50,000 p<'opk may nC'C'd resell IP-
many local sPnicC' pro\'iclC'rs who C'XJ)('rienced a sho1iagC'
ment assistance' for SC'\"Pral months or longC'r. SeYeral
of disposable' diapers, baby wPt wipes. infant formula
collaboratiw pfforts in the' 1etro Atlanta ru·C'a have bPC'n
launchC'd to addrPss the' immC'diatC' and short-l C'rm nC'C'ds
of those' who Ile-cl lo the' stale' of GC'orgia.
United Way
Se\·C'ral days aftN tlw storm, lln i tC'cl Way of Metro
Atlanta convC'nC'cl 200 conummity lC'aclC'rs rep rC'sent ing
gO\·emnwnt, nonprofit , faith ru1d business SC'c-tors. The'
rC'sult was the crC'ation of" C'ighbors I lelp ing Neighbors: l ·niting for Life aftc-r Katrina," an organization to
coordina te efforts in the' Atlru1ta region ru1cl lhC' state' to
rC'spond to the' long-lC'rm needs of familiC'S and incli\·i-
and baby food. IIomC'Aicl also assPmblecl "homp sta11c-r
duals displacC'd by the' hurricane'.
kit s" with essC'ntial household items for displacC'd farn-
The' group craft C'cl a 00-day rC'sponsC' plru1 to addrC'ss a
iliPs mO\ing into pC'rmruient homes.
rru1gC' of C'vacuC'C's' neC'ds: food , she lt C'r, transpm1ation,
In aclcl iti on HomeA icl is partnC'ring with the' UnitC'cl
health , rC' unificat ion or rP location, clocumC'ntat ion and
Way to construct 1ww "bridge'" housing for the' C'\'aCUC'C'S
identificati on , bC'nefits , school rC'acl in C'ss and C'cluca t ion,
un i ii they can make perrnanC'nl living arrangements.
C'mploynwnt, transitional or pC'm1anC'nt housing, child
Ewntually the bridge' housing \\ill SC'r\'e as transitional
care and youth dC'vC'lopmC'nl.
housing for homC'IC'ss familiC's.
The l 'nitecl Way projects t lw need for an incremental
T he Ho nt<' Builclc, rs Association has also c·ommittC'd
increase' o f $ 10 mi ll ion ovPr its initial $76.5 mi ll ion ca m-
to id entify <' mploy m C'nt oppo r tuni t iPS in At Ian ta for
paign goal to implement t11es<' p1i01ity resettkment it<'ms
Kat 1ina e\·acuees with eJq)('riC'nce in the homC'building
and to suppmi agencies on the front line' working with
industry. For more' information \isit: WW\\'.atlantal1omC'
those clisplacecl by tlw hunicanC'. For more inforniation ,
bui lders.com.
visi t the' website: www.un ileclwayatl an ta.org.
♦
Thi s artic l<' was writt ,· n by Sibyl llowC'II , rC'g ional C'O lll nnmi t_v
dC'\·plopnwnt lllanagPr at tlw Atlanta F0d.
HomeAid Atlanta and the
Photo by Liz Holl (' OUrl<'SY or FE:\lA.
Atlanta Homebuilders Association
HomC'Aicl Atlanta, an affi l iate' of the Grea ter Atlant a
Il om<' Bui lders Association , rC'spondC'd to hurricane'
FEDERAL
RESERVE
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BANK
OF
ATLANTA
tw ent y-o ne
FEDERAL RESERVE BANK OF ATLANTA
COMMUNITY AFFAIRS
DEPARTMENT
PRESORTED
STANDARD
U.S . POSTAGE
PAID
Atlanta , GA
Permit No. 292
1000 PEACHTREE STREET , N . E .
ATLANTA, GEORG IA 303 09 - 4470
CHANGE SERVICE REQUESTED
STAFF
VICE PRESIDENT
Strvr Folr y
COMMUNITY AFFAIRS OFFICER
Juan C. Sanc hez
COMMUNITY AFFAIRS DIRECTOR
Waynr Smi th
EDITOR
.Jr nnifr r Gri r r
PRODUCTION MANAGER
[l arrkll r Grissom
STAFF WRITERS
Jrss ica Lr\lrr n Farr
Sibyl l lowr ll
Mi kr Milnr r
ancy M ontoya
CONTRIBUTING WRITERS
Stan Fit tr rm an
Assan Jall ow
Darrin Wrbb
Financing Community Development:
Learning from the Past, Looking to the Future
A FEDERAL RESERVE SYSTEM
COMMUNITY AFFAIRS RES EARCH CONFERENCE
MARCH 29-30 , 2007
THE CAPITAL HILTON
WASH ING TON , D.C.
DESIGNERS
PelN llamill on
Ocli r Sw anrgan
Frrr subscri p ti on and additi onal
co pirs arr available upon r equ C'sl
by mail al lhC' Community Affairs
D C'pa.rl nwnl address ab ove, or
C'-m ail us at Parln ers@atl.frb.01:q,
or call 404/498-7287; FAX
404/498-7;142. T he views
cxprrssrcl ar r not necessarily
t hosr o f I he Fecl c ra.l Reser ve
Bank o f Al Ian ta or the F ederal
R<'sr1vr Systr m. Material may bC'
rr prinl C' d o r abstracted providC' cl
th al Parl n0rs is cr edited an d
providC' d w il h a copy of th e
publi c-al ion .
www.frbatlanta.org
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The Communil y Affai rs Onice rs of the Federal RC'SC' IVC' Sysl C'm
ar e jointly sponsoring tlwir fifth biennial r esearch confrrC'ncr, to
encomage objrcti vC' rC'SC'arch into th e factors govC'ming thC' availability o f cred it and ca pit al to incli,icluals and businesses w ithin
this changing fi mrn c- ial senices emironmenl. ThC' Philadelphia
Fed's Research Dr part ment and Conrn1w1il y Affai rs DC'parl mC'nt
are organizing thr c-o nf°NC'nce progran1. Th e conferr ncC' will bring
togetl1er a diverse' audiC'nCC' from academia, financial instiluti ons,
community organizati ons, found ations, and governmC'nt. The
Journal of Economics and Business intends to publish a spC'cial
issue on lhe lopics covC' rw l in lhe conferen ce.
The program co mn1itl eC' WC' lcomes research papC'rs and sludies
that fit the topic. Re fr r to the following website:
http://www.philadelphiafed.org/cca/confe re nces. h tml
lncli,i duals intC'rC'StC'd in prrsrnting their research should submit
via e-mail an elecl roni c- copy of I heir completed papC'r or a detailC'd
abstract by .July lG, 2006. TC'IC'phone inquiries can bC' !lladC' l o Amy
Lempe1t, Co!lllllUni ly Affairs Manager at the PhiladC'lphia Fr ei, at
215/574-6570.
@FedFRASER