Syracuse
United Neighbors (SUN) has been fighting for 10 years to ensure
local banks work for and with communities. But in recent years a
combination of redlining and abusive lending practices have emerged
as a new pattern in Syracuse low-income and minority neighborhoods.
In its constant effort to put quality loans into these communities,
SUN has won a $1 million investment into its neighborhoods on Syracuse's
south and west sides.
Over the past several months, members of SUN’s banking committee
have been meeting with Solvay Bank, a state bank, to discuss the
financial institution servicing the Fannie
Mae/NTIC Experiment.
The Fannie Mae/NTIC Experiment is a low down payment mortgage product
that allows homebuyers to purchase a home with as little as one
percent down out of their own pocket. If the home costs $50,000,
the buyer will only have to use $500 of his own funds. This is a
product geared for potential buyers who are paying rent and are
unable to save extra money.
In an unusual
twist, Solvay Bank representatives first approached SUN because
they recognized the importance of investing in new markets and neighborhoods
ignored by larger banks. When Solvay Bank agreed to service the
product in late winter, Fannie Mae gave the financial institution
a $1 million line of credit to make loans. SUN vowed to make sure
the bank make loans in their neighborhoods. Solvay Bank representatives
are excited about the product and forming a partnership with SUN.
A CRA agreement is also in the works.
SUN has been documenting the decline of lending over the past decade
while also noticing a rise in predatory lending. In 1993, sub prime
lending accounted for two percent of the loans going into SUN’s
neighborhoods. In 2000, it accounted for 44 percent.
“It feels great to have some banks who are willing to work
with us and who want to make loans into our neighborhoods,”
said Amanda Pascall, a Southside resident and member of the banking
committee. “We hope to use this victory to get the other banks
on board.”
SUN’s Banking committee also has the Syracuse Cooperative
Federal Credit Union, a local credit union, in agreement to use
the Fannie Mae/NTIC Experiment and they are working out a CRA agreement.
“We are going to continue to bring the banks back into our
neighborhood and we are going to keep winning,” said Claire
McGrath, Southside resident and member of the banking committee.
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