Editor's note: This Q&A appears in the April 2021 print edition of MReport, available here [1].
Following his emancipation, the erstwhile enslaved Henderson Faribault in 1860 acquired 50 acres of property and ultimately endowed homes to each of his eight children. One hundred and sixty years later, his great-granddaughter Tai Christensen entered the mortgage industry, where she says she was distraught to discover the “dismal” situation faced by aspiring Black homeowners. Christensen has served since 2019 as Director of Governmental Affairs at CBC Mortgage Agency (CBCMA), a national housing finance agency that provides down payment assistance.
She has spent those years working to increase homeownership in the Black community because she does not want her own story of success to be an anomaly.
“I want it to be the norm for our communities of color,” she says.
Thus, it comes as little surprise that CBCMA, in March, appointed Christensen its Diversity, Equity and Inclusion (DEI) Officer for 2021.
CBCMA’s leadership says the company’s DEI committee, with Christensen at the helm, will leverage its resources to promote a culture of inclusion for all employees and business partners, regardless of racial, ethnic, and gender identity.
“Tai has been an outstanding advocate in supporting down payment assistance for a spectrum of borrowers, particularly minorities and those in underserved communities,” CBCMA President Miki Adams said. “We have no doubt that she will excel at helping CBCMA elevate its vision of inclusive excellence.”
Christensen told MReport the strong principles instilled in her by her ancestors and parents fuels her ongoing determination to impart on her contemporaries and the industry at large the importance of diversity and how it is paramount to successfully carrying out CBCMA’s mission of helping minorities build intergenerational wealth through homeownership.
In honor of Celebrate Diversity Month, MReport is pleased to bring you this candid conversation with Christensen. She discusses what well-intentioned leaders sometimes get wrong, the “Black Tax,” politics and policy, and the personal experiences that drive her.
What are the most striking current statistics you've seen related to racial wealth disparity?
The latest Federal Reserve survey shows that the white median family wealth had increased to $188,000, and the median family wealth was $24,000 for families of color*. When you think about the disparity in those two amounts of money, the racial wealth gap is as wide now as it has ever been, and it is deeply, deeply concerning. You know, I hope that the Black community would have made some advances in increasing the wealth as a community standard, and that just has not happened.
How does this relate to racial disparities related to borrowing for a home?
What does less wealth translate to as far as mortgages are concerned? Look at the statistics we were just discussing. The Black community as a whole has far less wealth than their white counterparts. That translates into less money for a down payment, which means higher costs, higher mortgage premiums, higher homeowners’ insurance and the like. Additionally, the Black and brown community have what is known as “thin file” in the mortgage industry, which basically means that you have little to no credit in your in your credit score and your credit recording. The median white credit score is 751, and the median Black credit score is 626. Again, a very large disparity. That means they are going to lend themselves to using FHA and other programs that will assist with people that have less than 20% down, but there are some ramifications.
Wealth, in general, fell by about 30% across the board for all racial demographics. However, from 2010-2013, Black and Hispanic families lost an additional 20% of wealth, while the white family's wealth remained essentially unchanged. The racial wealth gap increased during that time period, and that translates to paying more for your mortgage when you finally are in a situation that you can afford to buy a home.
What is the so-called “Black tax?”
It's a phrase referring to how Black Americans are paying more for their mortgages. While it is not necessarily something that is racially charged. It is related to the fact that, again, Black Americans have lower credit scores by nature, by demographic, which, as discussed, leads to less available down payment and higher mortgage and interest rates. If you go back to the neighborhoods that were redlined, way back in the ‘50s and ‘60s, a majority of those neighborhoods have higher property taxes than their corresponding white neighborhoods across town. You're paying higher taxes to live in a less desirable neighborhood, and these neighborhoods are communities of color.
You know, people like to stick with like-minded people and people that look like them. Black and brown folks like to buy homes in Black and brown communities, and they're paying more for those homes, even though they're deemed “less desirable.” Black tax is just the fact that Black Americans pay more as a demographic for their mortgages than their white counterparts, and this all goes back to, again, credit scores. That really is the top tier—everything else is a trickledown from that.
How do you recommend dealing with these disparities?
Foremost, we have to look at this from a grassroots approach to educating these communities of color. In my family, we talked about the importance of money, the importance of spending money wisely, raising money, the importance of keeping your credit score high, the importance of paying your bills on time. That’s not typical in our communities of color. It's just not the norm. We as an industry have to do our part of educating our communities of color in a grassroots way, going into these communities and talking with them about the importance of protecting their credit score, talking with them about that delicate balance of getting enough credit that you are being fiscally responsible and you have a lower risk score, as opposed to abusing credit, getting too much credit, and then you're underwater.
There's a delicate balance there, and that balance needs to be taught. We need to go into these communities and talk to them about avoiding check-cashing establishments, payday lenders, these types of traps that that the communities of color find themselves getting into. It's a cycle, unfortunately; once you get one loan, you need to get another one to pay it off, and the interest rates get outrageous. Also, [there are] places like the rental center places where no credit is needed to buy furniture. That’s fine, but you're not doing anything to help your credit score as a borrower. While you could get a big-screen TV for the $100 a month or whatever it is, with no credit needed, that really is not helping yourself or, quite frankly, helping your community.
We've got to do what we can as an industry to work and educate folks on the importance of credit and the importance of saving. Fortunately, the company I work for, we have an initiative called the UHOUSI Initiative—this is where I spend a lot of my time at my job, going into the communities of color, working with church organizations, speaking to congregations about the importance of credit, of saving, of homeownership.
Have you seen any public policies of late that are addressing this disparity or this situation?
A couple of policies that have been sent up to the Hill. Neither bill has been approved, but Kamala Harris and Maxine Waters in November 2019 introduced the bill to invest $100 billion into affordable housing. That was a great start. Fortunately, not much has gone on with the bill because of COVID and other things have taken precedence. Invest in these communities. Start with affordable housing first, and the message, and then start implementing it.
Joe Biden has spoken of the down payment tax credit for first-time homebuyers. That was referenced over the past couple of months, that he would like to get that unpacked. Now, whether or not he can actually do that remains to be seen, but the conversation is being had. By and large, there hasn't been much policy that has been pushed to address this racial disparity issue. It's been a divisive issue in Washington, and there is much to be done by our policymakers to close the racial wealth gap.
Diversity, equity, and inclusion are topics of major focus for corporations across all sectors. What is something that leaders and professionals with good intentions tend to miss or not understand when it comes to inequality in hiring or within the workplace?
Some C-suite executives feel that having a single woman or person of color represented at the table is diversifying their workforce. While this is a great first step, it is also important to consider the life experiences and backgrounds of these individuals. For example, do you have people of color on your team who are educated from a historically black college or university (HBCU)? Do you have representation from individuals who may not have a college degree but do have years of experience in the industry and who arrived at this moment by working their way from lower-tier positions? True diversity is not simply hiring or promoting an individual based on color or gender. If you take a chance on someone who may have arrived at your desk by a non-traditional path, they will often bring a host of life experiences that would have never had a voice at the table.
How does improving diversity, inclusion and equity in the housing sector and at CBC Mortgage Agency impact the disparities in homeownership and related economic gap?
The hip-hop culture adage “real recognizes real” is one of my favorite sayings. It means, “I recognize the honesty and integrity in you because you recognize it in me.”
If the mortgage industry at large recognizes the value of diversity, inclusivity, and equity within individual companies and their employees, then the industry will value these attributes in borrowers. If the mortgage industry increases its diversity, that will translate into diversifying the pool of borrowers. Slowly, over time, as more diverse individuals become homeowners, the racial wealth gap will decrease.
At CBC Mortgage Agency, we truly value diversity within our work family and the unique upbringings, family structures, and life experiences every employee brings to our company. Each employee at CBCMA plays an important role in providing down payment assistance (DPA) to our borrowers. Our mission is to provide DPA to as many creditworthy borrowers as possible. To date, over 55% of our borrowers are minorities. These are people of color who would be unable to become homeowners without the assistance we provide. By purchasing a home, and beginning to grow equity through that home, our customers are creating intergenerational wealth for their families. One borrower at a time, we are slowly and sustainably doing our part to decrease the racial wealth gap.
What personal experiences have sparked your interest in Black homeownership?
You can trace homeownership in my family all the way back to 1860—my great-great grandfather was the first homeowner in our family. He started amassing property after the Emancipation Proclamation, after he was freed from being a slave. When he died, he owned 50 acres of land and he left a home for each one of his eight children.
I didn't realize how unique our family story is up until, really, the last decade, but he set the precedent for homeownership in our family and that has been the standard throughout the generations. So much so that my great grandmother, who I talk about all the time—this was not actually her relatives, but it was her deceased husband—she refused to be the only person in the family lineage who did not own a home. So, as a widow with four young boys, she managed to buy her own house in North Carolina and to keep it going throughout the family.
Everybody in my family is a homeowner. Everyone in my family has gone to college. We are all professionals—doctors, business owners. I am one of the only people in my family without a master's degree. We are highly educated because of his decision to acquire property. From that one choice he made, all the way down the line. So, when I got into the mortgage industry in 2002 and I realized that the black homeownership rate was so dismal, that was disturbing and deeply upsetting to me. I dedicated my career to increasing homeownership in the Black community because I do not want my story to be an anomaly. I want it to be the norm for our communities of color.
*Data from the 2019 Survey of Consumer Finances show a median household wealth for White families of about $188,000, compared with $36,000 among Latino families and $24,000 for Black families.