Allen Okamoto, AREAA Chairman 2007 with Speaker Pelosi.Photo courtesy of AREAA
With the real estate industry taking pause over the mortgage meltdown, the Asian Real Estate Association of America — founded four years ago to help close the homeownership gap among Asian Pacific Americans — has increased its membership by 50 percent.
The association, which will hold its convention on Nov. 11 to 13 in Las Vegas, has registered more than 12,000 AREAA in 38 states, up from 8,000 in 2006. “We’re probably the fastest-growing real estate association in history,” said Allen M. Okamoto, the group’s chairman and owner-broker of T. Okamoto & Co.
With explosive membership growth has come influence. Freddie Mac and Fannie Mae — government enterprises that make and guarantee loans — have opened their doors.
House Speaker Nancy Pelosi spoke at a San Francisco event for the group.
The group’s influence is also being felt in Congress as it closes the gap between the 62 percent of APAs who are homeowners and the 71 percent rate nationally. A bill to reform Fair Housing Act loans — a federal program that insures private sector loans to lower income homebuyers — passed the House two months ago and is going to the Senate.
Because such loans had dropped by half, especially among first generation homebuyers, the group successfully added an amendment to allow immigrants to qualify for loans without FICO scores (an industry measure of a homebuyer’s credit worthiness). Under this bill, according to Okamoto, “you could use your insurance bill, rent payment and PG&E bill” and other untraditional means to qualify for FHA home loans.
“We have a newer immigrant population [from mostly Latin American and Asia], and they may have come from countries where keeping money in banks and buying things on credit was not common,” said John Yen Wong, the group’s founding chairman and a broker associate of Prudential California Realty in San Francisco. “When you run the traditional credit check on them, it’s not that they had bad FICO scores. They were not score-able.”
With the recent downturn, “the Asian segment of the housing market has been less affected than the first generation homebuyers,” Wong said, attributing it to APAs making larger down payments and avoiding, for example, riskier mortgages requiring little or no down payments.
“The default rate among the Asian segment of the population is not as bad as some of the others,” Wong said. “But we’re not totally immune.”
Vietnamese Americans and newer immigrants took more of the blow, compared to Chinese and Korean Americans. APAs living in costlier markets like California and New York tended to apply for loans exceeding “conforming loan limits” of $417,000. As a result, their rates were higher, said Wong.
The group is working on raising that $417,000 limit to keep rates lower. “[We] recognize there is a wide differentiation in home prices for the APA community. Because of its concentration in these areas, they are disproportionately impacted.”
But high prices on the West Coast opened up opportunities in the South. “I have seen big changes in the South and East,” said Emily Fu, the group’s incoming chair and director of RE/MAX’s greater Atlanta office, who has lived in Atlanta for 30 years since arriving from Indonesia. “The Asian population is growing leap and bounds, coming from the West Coast because of the affordability of housing and opportunities.”
The group is also adopting an increasingly international scope. This year more than 200 practitioners from Asia will be attending out of an expected 1,000 at the convention — including the vice president of the China Real Estate Association, which is structuring that country’s emerging real estate industry, and the owner one of the largest real estate companies in India.