Hispanic Real Estate Professionals Take Action to Curb Predatory Lending Practices Against Latinos

RISMEDIA, Sept. 18, 2007-The National Association of Hispanic Real Estate Professionals (NAHREP) announced its new Code of Trust – a set of ethical principles by which all members are required to conduct business. En Confianza: The NAHREP Code of Trust is part of NAHREP’s broader strategy to ensure that all borrowers, including Latinos, are served to the highest industry standards.

“A perfect storm of shrinking values and the current credit crunch threatens to undermine
the steady homeownership gains our community has made in the past 20 years,” said
NAHREP President & CEO Tim Sandos. “For those borrowers who have fallen prey to
unethical practitioners, the American Dream has become a nightmare. Our newly-adopted
Code of Trust ensures that our members set an example for the industry as a whole.”

The En Confianza Code of Trust was unveiled at NAHREP’s 2007 Hispanic Marketing
Convention & Expo in Orlando. Its goal is tri-fold: (1) regain and maintain the public’s
confidence; (2) protect all consumers; and (3) sustain and increase the rate of Hispanic
homeownership.

“Our industry’s image is tainted by the actions of a few bad actors. En Confianza solidifies NAHREP’s position as an industry leader, and its members as trustworthy and reliable professionals,” said NAHREP Chair Felix DeHerrera.

The Code of Trust also responds to the demands of NAHREP’s members. The
organization’s own research shows that:

- 93% say Hispanic borrowers are disproportionately vulnerable due to lack of
knowledge of the home buying process
- 89% favor stronger licensing and more education/training
- 74% support stricter standards and disclosures

En Confianza sets requirements for four groups of professionals – mortgage originators;
licensees and realtors; builders; and providers of title, escrow, home inspection, and closing services. The Code is based on measures that foster ethical and responsible lending, protections for consumer choice, full disclosure and accountability: The principles include:

- Stronger licensing and industry education requirements
- Quality controls such as prime loan filters and net-benefit tests to ensure that all
qualifying consumers are offered a prime loan
- Increased levels of disclosure so that borrowers can make informed decisions
- Development of a bi-lingual guide to educate consumers on all choices of products
- Protections against conflicts of interests
- Full compliance with all state and federal laws

“NAHREP will lead the way to make sure that Hispanic homeowners remain in their homes and that new buyers make the most of the current marketplace environment,” said
NAHREP member Yamila Ayad, a veteran mortgage broker.

The first steps NAHREP has taken to enforce the Code include joining forces with the
Conference of State Bank Regulators and supporting the establishment of a “whistle blower hotline,” to which industry professionals and consumers can report misconduct by
practitioners. In that regard, an industry-based peer review with due process, including the opportunity for reported individuals to respond, is also recommended as part of the hotline.

A copy of En Confianza: The NAHREP Code of Trust is available at the organization’s Web site, www.nahrep.org.

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