A lender in the neighborhood.

Author:Sichelman, Lew
Position:Community lending - Includes related article

Business is done just a bit differently in an inner-city branch. A branch manager in San Diego's inner city explains that if making money is all you're after, you're not right for the job.

John M. Robbins, Jr. makes community lending sound so easy.

"What the hell are we afraid of?" the 45-year-old president, chief executive officer and chairman of the American Residential Mortgage Corporation chides.

"People of color love their homes just as much as anyone else. Their house payment is the last payment they will intentionally miss."

Of course, if anyone knows it's not that rudimentary, it's Robbins, who has taken a leading role in pursuing minority and inner-city homebuyers. They need extra help, sometimes a lot of extra help, in wending their way through the complicated process of applying for a mortgage. But Robbins, whose office is in posh La Jolla, California, has made a commitment to fair lending.

Underscoring that pledge, American Residential, a publicly traded company with 86 branches in 26 states, has opened three inner-city branch offices, one in Denver, another in Philadelphia and a third in San Diego, and will soon open a fourth in Oakland.

If you want to be successful in reaching minorities, Robbins believes, "you have to be in the neighborhoods where you can set up relationships with dignity and respect." Minorities who live in the inner city don't like traveling to suburban offices "because they don't like the decisions coming out of them," he explains. "They want to talk with people they can trust, people who can give them a road map and promise that if they do what they are told, the next time they walk in here, they will be successful."

But words like dignity, respect, trust, relationships and commitment--especially commitment--have been tossed around so easily these last few years that they have become just that, words--words whose meanings have been all but lost. So, to learn what it is that Robbins is really saying, I asked to spend a day in the South San Diego office of American Residential.

And so here I am, a few minutes before 8 a.m., entering the office in a small strip center on Home Avenue in the City Heights neighborhood. I'll be spending the next eight hours with Wendell B. French, an African American with nearly 15 years of mortgage banking experience whom American Residential has chosen to manage the branch and its staff of three minority loan officers and two processors.

I'll also be talking at some length with two other senior executives with American Residential, also African Americans. One is Edward Owens III, the vice president of fair lending who was lured away from Fannie Mae, where he worked on the agency's Central Cities Initiatives. The other is the man who hired Owens, Clinton Elmore, who as senior vice president of the California division, oversees not only French's branch but 21 suburban offices as well.

During the day, we'll also visit with a sampling of players with a stake in this community, including community activists, community development specialists, ministers, a builder and real estate agent and, of course, some real live homebuyers. Well, actually, just one extremely nervous young couple buying their first home. The others scheduled to come in this day cancel their appointments, but that, I learn, is par for the community lending course.

But let's get back to French. He's here before I arrive--his day starts consistently at 7:00 a.m. because it's the only "quiet time" he has to do his paperwork--and he's here long after I leave. The hours "go with the territory," but the 45-year-old branch manager says they're really no longer than those put in by the better loan officers in suburban locations.

"If a loan officer is working aggressively, he'll spend about the same amount of time in either location," he explains. "The difference in working here is the nights and weekends. We are involved in a lot of community groups, and they typically meet after work and hold their events on Saturday or Sunday."

The branch manager is dressed in shirt and tie, and I wonder if that is the appropriate uniform for inner-city lending. Not necessarily, he responds. "The people who come in here might not be wearing coats and ties, but I do, especially when I'm out. When I'm in, I can be more casual because that's part of the 'down home' atmosphere we're trying to create. We're trying to be less intimidating, less threatening. It's our way of relating to our clients."

But, while the people who work here can be somewhat more casual, the office itself cannot. Even though many of French's clients are blue-collar people who are uncomfortable dealing with people who are too formal, an inner-city office shouldn't be outfitted any differently than one in the suburbs, he says. "You want the same great-looking office, the same furniture, carpeting, high-tech equipment, because you want the people coming in here to realize that they're not receiving anything less than if they had gone to La Jolla to get their loan."

Same loans, same treatment

And in that regard, French stresses that although his is a community-based branch, the "exact same loan programs" that are available in the suburbs are available here, too. "My neighbor just refinanced, and I asked him why he didn't come to me," says French, who lives in nearby Lemon Grove, a middle-class neighborhood about five minutes from work. "He said he thought I just did low-income loans. But the truth is, if someone wants to come across the Coronado Bridge for a loan, we can do it. John Robbins could send his best friend in here, and he'd get the exact same treatment as our regular borrowers."

The strip center location is basically a function of what was available. There aren't any office buildings in City Heights. But the decision to open a store-front office turned out to be a good one, and not just because there's a doughnut shop 50 feet away. "In retrospect," the branch manager says, "I like the fact that people can drive up to our front door, get out of their cars and walk right in. It's just one more barrier we've been able to knock down."

The first meeting of the day is promptly at 8 a.m. with Charles Flack, a community development specialist with the Metro Area Advocacy Committee on Anti-Poverty of San Diego County Inc., or the MAAC Project for short. MAAC started out as a community action agency in the mid-1960s, prior to Lyndon Johnson's War on Poverty, but has evolved into a countywide social agency providing 50 different services.

Flack is here to discuss two houses MAAC wants to sell. But before he can begin, French suggests that American Residential hold a homebuying seminar for MAAC's 200 employees. French is big on seminars--he'll suggest another in a later meeting with Pastor Amos Johnson of the New Creation Church, the most ethnically diverse church in the community. He likes homebuying seminars because they're interactive, allowing his loan officers to deal "face-to-face" with homebuying hopefuls.

During both meetings, the branch manager talks about "incentivizing" participants, perhaps with a certificate for a free appraisal or by waiving processing and underwriting fees. He makes the offer even though he doesn't have permission from the home office, but he thinks it's necessary and is pretty certain La Jolla will go along. After all, American Residential has done the same for its own employees.

"There's lots of competition to create buyers with...

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