Inner city developer

Frank Parlato worked in the inner city of Buffalo, to promote home ownership. Here are some articles that appeared in Buffalo News and other information:


Plan Seeks Homes to Sell to Low-Income Renters

Buffalo News

Group would purchase, rehabilitate property owned by Absentee Landlords

News Staff Reporter

September 07, 1993

An idealistic developer, together with a cadre of neighborhood activists, is launching an ambitious program to buy out absentee landlords, rehabilitate the properties and sell them to low-income renters who want to own their own home.
If that's not enough, the group also intends to hire several dozen neighborhood residents to make the necessary repairs, organize block clubs in the neighborhoods they buy in and transform vacant lots into small parks and community gardens.
The group is optimistic that it can turn around at least 50 houses within a year and 500 over the next five years.
The non-profit group, Neighbors Inc., is a marriage between developer Frank Parlato Jr. and a collection of sometimes militant neighborhood activists in the Broadway-Fillmore area.
Parlato has bought, rehabilitated and sold several hundred houses to city residents in the past five years. He is best known for his "green" development practices in the suburbs, where he has retained large portions of his subdivisions as nature preserves and tried to sell pristine land to townships so the property is used as parks rather than subdivisions.
His activist partners in the non-profit venture include Robert Sienkiewicz, executive director of Broadway-Fillmore Neighborhood Housing Services, and Robert Meldrum, best known for his work picketing the homes of slumlords.
"We're making a call to absentee property owners: We are ready, willing and able to buy every single absentee-owned property that is offered at a fair price," said Parlato.
The approach of Neighbors Inc. is distinctive in several ways from current government programs:
It doesn't involve any government money.
Parlato is underwriting the program with about $ 90,000 in equity and said he has made arrangements for up to $ 600,000 in additional financing.
Profits from the sale of rehabilitated houses will be used to sustain the program.
It is targeted more at poorer families than most established programs.
Parlato and Meldrum said they will target families with annual incomes of $ 12,000 to $ 25,000.
Renovated houses, most of which will be doubles, will sell for $ 20,000 to $ 40,000.
The group also will explore hiring welfare clients as part-time repairmen and using the income as a down payment to help them buy a home that would be paid for with their housing allowance. When the house is sold, the government would recoup its housing allowance through the sale proceeds.
Development of green space, which Parlato termed a big part of the program.
"Wherever we can, we will buy vacant lots and plant trees," he said. "Half our money will be invested in houses and the other half for planting trees, developing gardens and creating access to beautiful things in the city."
The group intends to buy only property from absentee owners and from the government. It has bought its first house, a double at 124 Ruhland Ave.
The group's target area is bounded by William Street on the south, Bailey Avenue on the east, Jefferson Avenue on the west and Delavan Avenue on the north, although it remains interested in absentee-owned houses on the West Side and in the Kensington-Bailey area.
Prospective buyers, sellers and employees can reach Neighbors Inc. at 885-5463.
Once applicants are deemed "bankable," the group will work with them to obtain mortgages. Selected banks in the area have set aside mortgage money for buyers of modest means, and Neighbors Inc. intends to work primarily with those banks.
The Neighbors Inc. program is the second major housing initiative announced in the past week. The city, in conjunction with a network lead by Chief City Judge Frank A. Sedita Jr., is launching a "dollar and a dream" homesteading program this month that will involve the city's renovating and selling abandoned houses to owner occupants.


From Slumlord to Social Activist

'Conversion' Inspired Efforts at Neighborhood Salvation

Buffalo News


September 19, 1993

Ten years ago he was a "slick slumlord" in Buffalo, an owner of close to 100 rental units, many of them run-down.
    Since then -- after spending time in a Hindu monastery and wandering the streets in tattered clothes to meet the homeless -- Frank R. Parlato Jr.
has undergone a conversion.
    The housing developer is a neighborhood activist now, with a growing reputation stretching from Clarence to Hamburg.
    His projects: creating green space near a Hamburg housing development; establishing a wildlife preserve along Tonawanda Creek in Clarence; paying welfare recipients to pick up litter in Buffalo; and, most recently, establishing a corporation to continue his practice of buying Buffalo inner-city slum houses, fixing them up and selling them to the occupants.
    He even tinkered with a save-the-trees telephone hot-line.
    Who is this guy, anyway?
    To start with, Frank Parlato is a 1973 graduate of Sweet Home High School, an accomplished keyboard player and a successful real estate developer.
    He is a reflective man who still lives in a Hindu monastery from time to time. He also trades his business suits for street clothes a couple of weeks each year, roaming the streets as a homeless man in Buffalo, Chicago, Atlanta, Washington and Los Angeles.
    "My experiences as a penniless wanderer helped me develop a genuine love for people," he said. "Before that, I was more selfish."
    His monastic life also helped change him.
    "My life in the monastery, which is still ongoing, has helped me become a better Christian. I learned Christianity from living with Hindu swamis. I learned the oneness of human life."
    The one-time slumlord last week helped East Side neighborhood activists launch a program to buy out absentee landlords, fix the properties and sell them to the low-income renters.
    It's not just talk. He's putting up his own money, which he has earned as a real-estate developer. Neighbors Inc., a non-profit venture with no government money, will rely on about $ 90,000 from Parlato, who claims to have arranged for up to $ 600,000 in additional financing.
    Parlato, 38, also has his developer's eye focused on the suburbs, where he has bought housing subdivisions, reconfigured them for fewer housing units and then created a permanent forest preserve. And he instituted a save-the-trees hot line, seeking public donations to help towns acquire green space.
    Some public officials still are scratching their heads over the apparent changes in Parlato.
    "He seemed like a typical slick slumlord when we first encountered him about eight to 10 years ago," Fillmore Council Member David A. Franczyk said.
    Recently the "new" Parlato met with Franczyk, in an attempt to help low-income occupants own the homes they rent from absentee landlords.
    The Council member told Parlato that he looked like a Hindu mystic, with his long hair, beard and glowing dark eyes.
    "It was not the Frank Parlato I knew," Franczyk added. "He had a conversion, it seemed to me."
    Two other incidents help describe the Frank Parlato of today:
    About two weeks ago, Parlato walked down Ruhland Avenue and made fast friends with some 60 neighborhood kids.
    "He's the first guy I've ever met who walked down the street, said 'hi' to every kid he saw and bought ice cream for each kid," said Robert Meldrum, an activist who has picketed slumlords and is working with Parlato on Neighbors Inc.
    Last month, Parlato proposed a 200-unit senior citizens' housing park in the Town of Hamburg. When public opposition surfaced, Parlato vowed to scrap the plan if too many neighbors objected.
    "I've done a lot of developments, and I've never done one where I've overrun the neighbors' concerns," he said at the time. "How can it be a good, humanitarian project if you start out with all the neighbors upset?"
    Parlato recently withdrew the Hamburg proposal in favor of a new site in Eden.
    Local housing activists, some of them fed up with government housing efforts, are impressed by Parlato's plans.
    "I'm ready to give him a lot of leeway, and I'm not concerned about his background, because I've seen him deliver everything he's promised so far,"
social worker and housing activist Richard D. Kern said.
    Meldrum said he has spent almost every day in the last six weeks working with Parlato on Neighbors Inc.
    "I can find no way that he's going to benefit, except from his interest in green space and humanitarian efforts," he said.
    Is the man too good to be true?
    Parlato said he is gratified by the question and doesn't know how to answer it.
    But he realizes others will be watching him closely.
    "I would have to be a very stupid person to engage in this activity and do anything other than my stated objectives, which are to increase green space, preserve our forests, clean up our creeks, bring the wealth back to people through home ownership, bring our neighborhoods back and create a wonderful legacy for the next generation."
    Parlato claims he has evolved, changing gradually over the years. He admits to his past mistakes. By today's standards, he said, he probably was a "borderline slumlord."
    "I'm not glad I made the mistakes, but I learned from them," he said.
    Following his 1973 high school graduation, Parlato said, he worked as a keyboard player, accompanying show bands, making as much as $ 2,000 per week.
    But he left in 1975 to join a Hindu monastery after having read a lot of philosophy. Through the early 1980s, Parlato lived a split personality, spending much of his time in two Midwest monasteries, even staying with a Catholic monk who had taken a vow of silence.
    Those insightful experiences, though, were sandwiched around a pretty wild lifestyle.
    "I was on a pendulum," he said. "I'd try to live the monastic life for a while and then come back and live just about the opposite life. I was involved with some street gangs, but I never did anything violent. I lived a fast life, and drugs (marijuana) and alcohol were part of it. But I grew from that."
    Gradually, the human suffering he saw began to sink in and change him.
Along the way, Parlato -- who said he earns a middle-class salary -- less than $ 50,000 -- as a real estate developer -- became interested in the homeless.
    Knowing he couldn't approach the homeless in a suit and tie to ask them how they were doing and what they were feeling, Parlato took to the streets himself.
    "I didn't want a bird's-eye perspective," he explained. "I wanted a
worm's-eye perspective."
    What did he learn from being homeless?
    "I learned that there really is no racism in our hearts," said Parlato, who believes most people are predominantly good. "When we're absolute equals and don't define ourselves by color, there is no racism."
    City officials and fellow activists working with Parlato on the Neighbors Inc. project seem a little leery of his uneven past, but eager to see if he delivers.
    "Let's give him a chance," Franczyk said. "If he messes up, we'll be on him like a dog on a bone."


Off Main Street

Buffalo News

October 03, 1993, Sunday, Final Edition

... Parlato project

Frank Parlato Jr., the Hindu-inspired housing advocate for the poor, is staging a going-out-of-business sale among East Side landlords.
The phones at Parlato's Neighbors Inc. have been ringing off the hook in the three weeks since he offered to buy houses from absentee landlords.
Property owners, ranging from well-known slumlords to good folks
discouraged by the rental business, have offered to sell 500 East Side houses on more than 100 streets.
Some are so anxious they're offering to turn their properties over for as little as $ 1 or for a promise to pay back taxes.
"I can't believe the response," Parlato says. "It's been a steady slew of calls."
Neighbors Inc. plans to buy and repair houses and then sell them to owner occupants. More than 150 prospective buyers have called to find out how they qualify.
That number, by the way, is 885-5463.

Off Main Street is written by Phil Fairbanks with contributions by Jerry Zremski, Tom Dolan, Rick Stouffer, Farah Safiuddin and Jim Heaney.


Parlato Prods City's Renters to Purchase Homes Co-Founder Says Non-Profit Group Offers Help Understanding Mortgage Process

Buffalo News

News Staff Reporter

October 09, 1993

Activist developer Frank Parlato Jr. has issued a call to arms for the city's working class renters: Buy a house.
    "Get up and get qualified for a mortgage," he said. "You owe it to the city, your family and yourself to get qualified and get a home."
    To them, a non-profit organization that Parlato has helped establish now is offering to help prospective buyers determine if they qualify for a mortgage. The organization, Neighbors Inc., has established a hot line that usually can tell callers within an hour whether they're bankable. Neighbors Inc. is being assisted in the program by Broadway-Fillmore Neighborhood Housing Services.
    Some city residents are under the mistaken assumption they don't earn enough to qualify for a mortgage, Parlato said. Others simply don't know how to go about obtaining one.
    "There are 10,000 people in the city who are qualified to own a house and don't even know it," he said.
    And, he added, there is an ample supply to meet the demand of prospective buyers.
    There are more than 1,300 homes, mostly singles and doubles, for sale on the East Side. In addition, Neighbors Inc. is ready to match up buyers with about 200 properties that absentee owners are willing to sell.
    "The market it glutted," Parlato said. "There's a tremendous opportunity like there's never been before."
    Given the price of houses on the East Side, Parlato said families with an income as low as $ 12,000 can potentially qualify for a mortgage. The key to qualifying, he said, is having a steady job and a reasonably good credit history. Parlato noted that loan standards have been liberalized in recent years because of new federal regulations and that even those with a bankruptcy in their history could be eligible.
    The number for Neighbors Inc. is 885-5463. Callers should be prepared to provide basic information on their employment and credit history. Neighbors Inc. will review the information, run a credit check and tell the caller whether they appear qualified to obtain a mortgage. Parlato cautioned that the assessment would be preliminary and that a formal application through a Realtor or bank would be necessary to actually obtain a mortgage.
    Neighbors Inc. is continuing to field offers from absentee landlords who want to sell their properties. Parlato said about 600 properties have been offered for sale. The group has hired eight neighborhood residents to make repairs on properties it is buying in anticipation of reselling them to owner occupants.


Activists Break With Developer Over Housing Members of Neigbors Inc. Question Parlato's Motives

Buffalo News

News Staff Reporter

November 04, 1993 , Thursday, City Edition

The marriage between developer Frank Parlato Jr. and several prominent inner-city housing activists is off.
The activists are divorcing themselves from Parlato and his Neighbors Inc.
over what they say is his method of operation. They contend Parlato is disorganized, doesn't consult with others in the group before acting, is preoccupied with garnering publicity and has made some questionable business decisions.
"The problem is not that Frank Parlato has bad intentions. But he is very difficult to work with," said Robert Meldrum, a founding member of Neighbors Inc. who has resigned as treasurer.
"He's a one-man band," Meldrum complained. "Some of the things he was doing could get us into legal trouble."
Other activists are less charitable in their assessment.
"I am suspicious that he wanted to use others to bring himself
credibility," said Robert Sienkewicz, executive director of
Broadway-Fillmore Neighborhood Housing Services and a key member of Neighbors Inc.
Sienkewicz and several other members of Neighbors' advisory board have joined Meldrum in resigning from the organization.
Parlato chalks up the split to "conflicting styles." While he praised
Meldrum and Sienkewicz, he disputed their criticism.
"It's easy to criticize and hard to build up. I'd like to be judged by the ultimate results," Parlato said.
Parlato and Meldrum, one of the city's leading housing activists,
established Neighbors Inc. this summer as a non-profit corporation. Their intent: to buy houses owned by absentee landlords, repair them and sell to low-income families who would live in them.
Favorable publicity about the group in recent months prompted the absentee owners of more than 500 houses to offer their property for sale to Neighbors. Several hundred potential buyers also contacted Neighbors Inc.
Meldrum said that too often, Parlato did what it took to generate favorable publicity without tending to the details or consulting with others in the group.
Meldrum said he became increasingly concerned about the direction Parlato was taking Neighbors. Parlato's willingness to work with notorious landlords to repair and sell properties was especially troubling, Meldrum said.
Meldrum said he took exception to Parlato's attempt to persuade him to write Chief City Judge Frank A. Sedita Jr. last month, asking him for leniency in his sentencing of Lovejoy Council Member Norman Bakos. Bakos is one of the landlords who has expressed an interest in selling some of his property through Neighbors.
Parlato characterized his growing interaction with landlords such as Bakos, Michael Lewin and John Kausner as a healthy development because it may lead them to improve their properties and then sell to owner occupants.
Parlato doesn't dispute claims that he has been disorganized or that he wasn't able to come up with the cash he had promised to bankroll the operation. But he said a new advisory board met Wednesday to establish committees in a restructuring effort.
"My intentions are good," he said. "My true desire is to help conditions in the inner city."
Parlato and Meldrum agree on one thing: that the concept behind Neighbors is a good one.
"It's a worthy idea -- and workable," Meldrum said. "But it needs to have somebody else at the helm than Frank Parlato."


Parlato is a Publicity Hound, for a Cause

Buffalo News

By Frank Parlato Jr.

November 15, 1993

A Nov. 4 article said my critics found me "preoccupied with garnering publicity."
    The statement is 100 percent true, but it needs further clarification. I am seeking publicity not for myself, but for certain social issues. I am a media hound for the causes I believe in.
    What are they? To increase green space; to preserve forests, to clean our creeks and rivers, to stop pouring filth into the air and water, to bring wealth back to the people through universal home ownership, to bring our neighborhoods back to peace, to end racism in this generation.
    My projects to date: creating green space near a Hamburg development; establishing a wildlife sanctuary along Tonawanda Creek; opening up for public access Buttermilk Falls along 18 Mile Creek; paying welfare recipients to pick up litter in their neighborhoods; creating a program for indigent people to sell newsletters; buying inner-city slum houses, fixing them up and selling them to owner-occupants; and establishing a standard
for buying housing subdivisions, reconfiguring them for fewer housing units and creating a permanent forest preserve with the land that was saved.
    Some of my projects have not been successful. I established a "Save the Trees hot line" last year, seeking public donations to help towns acquire green space. It failed to raise much money. It didn't get enough publicity.
    Currently, I am seeking publicity to try to increase the level of
owner-occupancy in the inner city.
    There is much to be done, and the conditions in the inner city are sometimes so sad that there aren't enough tears to shed for all the sorrow.
    On the other hand, there has never been a greater opportunity for home ownership.
    Slumlords are on the run; it's a buyers market. Banks are required to make loans in the inner city, and interest rates are the lowest they've been in 20 years. Yet there is little movement in the market.
    In a city where only 41 percent of the people own their own homes, it seems that few know the good news.
There are thousands of tenants who would qualify to own if they knew what to do. But how do we get the message out?
    So, yes, I did seek publicity for this and for all my causes. And I will continue to do so and to encourage others to take up the cause and do a better job than I.


Area Lenders Have a Way to go for Equality in Mortgage Access

Niagara Gazette


January 29, 1995, Sunday, Final Edition

Minority home buyers in Erie County find it easier to get mortgages today than four years ago, but many lenders have a long way to go in granting equal access to credit, a Buffalo News analysis of nearly 44,000 loans made here in 1993 shows. Local lenders still turn down more mortgage applications from black and Hispanic applicants than from white applicants -- 20 percent of blacks were turned down in 1993 versus 6 percent of whites, for instance.
    But the gap has narrowed since 1990, when 30 percent of black mortgage applicants were rejected, compared with 8 percent of whites.
    The local minority rejection rate in 1993 was lower than the national average of 34 percent, which has not changed since 1990.
    "There has been a lot of success, but a lot of the success is by a relatively small group of lenders compared to the total," said Michael Taliefero, whose Channel Link Partners in Washington, D.C., consults with lenders in Buffalo and across the nation. "There still are a lot who haven't gotten religion."
    Erie County loan records for 1993 show:
    Although black homeowners and renters make up 11 percent of the county's population, only 5 percent of all mortgages granted in 1993 went to blacks.
    Six percent of local homeowners are black, but they got only 1.6 percent of refinanced mortgages in 1993, a year when lenders made record numbers of refinancing loans here.
    Most loans to blacks went to integrated neighborhoods on the eastern and northeastern edges of the city. Lending also is reaching adjacent suburban neighborhoods. The only concentration of central city lending to blacks is in the neighborhoods adjacent to downtown where there are pockets of new-home construction.
    Only 33 of the 798 loans to blacks for home purchases and refinancings went to inner-city census tracts.
    Realtors say part of the problem with the inner city is that homes just aren't selling.
    "In the city, it is taking six months to a year to move properties," said Tom Evege, who runs Tom Evege Real Estate Co. at 1600 Jefferson Ave. and is one of three black real-estate appraisers in the city.
    New programs help
    A handful of local banks and regional mortgage companies that made special efforts since 1990 to boost their minority lending have had success. The number of loans to minority home buyers and those fixing up their homes has increased by 39 percent in the county since then.
    Inner-city real-estate agents, including Bill J. Gillespie, who has run his own agency on Bailey Avenue for more than 40 years, have noticed a difference.
    "This year, I've had a good experience with the programs that the banks have instituted for the purpose of relaxing the requirements to qualify (for a mortgage)," he said. "They have worked excellently."
    Other lenders don't seem to be making much of an effort to court minority borrowers in Buffalo. Some mortgage companies, for instance, don't open offices in local communities. Instead, they work through local mortgage brokers who tend to do business in white, affluent suburbs.
    The 1993 lending records show that 29 independent mortgage companies operating in Erie County last year took few or even no applications for mortgages from black home buyers.
    One of those was SBU Realty Credit Corp., a Syracuse-based subsidiary of the Savings Bank of Utica, which took 215 home purchase and refinancing applications in Erie County in 1993. Only two were from blacks and two from Hispanics.
    The company works through local mortgage brokers, which may be why it took few minority applications, said spokesman Walter Rogers.
    "It's the brokers; it doesn't make any difference to us," he said. "It's where they do it and where they get the loans from."
    Some lenders do little
    Even among the county's largest lenders, some big banks and mortgage companies took relatively few applications from blacks and granted blacks even fewer purchase and refinancing mortgages.
    The News ranked the 14 largest lenders that each had more than 1.5 percent of the county's mortgage market. The rankings evaluate their performance in
lending to blacks based on the percentage of applications for mortgages they took from blacks and the percentage of mortgages they granted to blacks. Those percentages were compared with the average percentages of all lenders in the county and to the population of black homeowners and renters.
    Fleet and M&T banks, along with four mortgage companies -- GMAC Mortgage,
Sibley Mortgage Corp., Power Funding Group and Spectrum Home Mortgage -- had above-average performances.
    Other banks and mortgage companies did poorly: Applications from blacks taken by Chase Manhattan, for instance, amounted to only 2 percent of all applications it took in 1993.
    Chase Home Mortgage Corp. was among a group of national lenders that were identified independently as being among the nation's worst lenders to minorities by the National Community Reinvestment Coalition, a lobbying group in Washington, D.C.
    Lockport Savings showed up poorly in the rankings, probably because it has only three branches, all in predominantly white suburbs of Erie County. It did well in a ranking of the rejection rates because it did not turn down any black mortgage applicants.
    "This indicates a need by these institutions to re-examine their marketing efforts and ask themselves some serious questions about why
African-Americans may not find it worth their while to apply for a mortgage from their institutions," said Scott Gehl, executive director of Housing Opportunities Made Equal in Buffalo.
    Banks felt the pressure
    Experts say it was the 1991 public disclosure of comparative rejection rates for minority and white mortgage applicants that convinced lenders they had to change their practices.
    Fair-housing advocates had long insisted that lenders ignored minority neighborhoods and shunned minority applicants.
    However, it is very hard to prove an individual case of mortgage
discrimination has occurred, because lenders can point to many objective reasons for turning down a loan. The Department of Housing and Urban Development, which investigates complaints, has received only four complaints over the last year from Western New Yorkers. None of the complaints resulted in actions against lenders.
    In 1991, fair-housing advocates finally got the hard numbers to prove their case. In that year, federal bank regulators released data on the race, sex and income characteristics of every applicant for a mortgage and home-improvement loan in 1990.
    The statistics were damning: Blacks were more than twice as likely as whites of similar income to be rejected for mortgages. A year later, the Boston Federal Reserve Bank looked at credit information in loan files at local banks and found that minority applicants with credit histories similar to whites were rejected at higher rates.
    A study released last week on default rates on 220,000 federally subsidized mortgages found that the default rate of black borrowers was higher than for whites. Fair- housing advocates have criticized the study, because the mortgage program used in the study is targeted at low-income borrowers who are more likely to have problems paying back a loan.
    But it was the data on loan rejection rates, released under the federal Home Mortgage Disclosure Act, that had a great effect on lenders.
    When local numbers for 1990 revealed a higher rejection rate for minority applicants, local lenders at first vehemently denied that they discriminated in their lending.
    That attitude changed during the ensuing national debate over whether the home mortgage lending system unintentionally discriminates against applicants who do not meet the profiles of white, middle-class borrowers.
    "Without question, there can't be a responsible institution that doesn't pay attention to that kind of information," said Robert Bartkowski, community reinvestment officer for Key Bank in Buffalo.
    Even if lenders didn't focus on their moral obligations, they had to react to negative news stories, fair-housing advocates say.
    "I think the industry has begun to understand what a horrible public relations problem the HMDA data has become for them," said Jerry Jones, a spokesman for the Association of Community Organizations for Reform Now in Washington, D.C.
    More minority loans
    A lot of local lenders, especially the largest, paid attention. Banks like M&T, Key, Marine Midland, Fleet and Rochester Community Savings Bank as well as mortgage lending companies like Sibley and PNC instituted programs that include low down payments, alternative qualifying standards and second looks at rejected minority applicants.
    Local lenders say last year's lower rejection rates for minorities don't tell the whole story: What's more important is that more minorities are getting loans.
    Black home buyers in Erie County got 491 mortgages in 1993, almost double the number granted to blacks the previous year.
    But because minority home buyers continue to be rejected more frequently than whites, critics say, discrimination remains a serious problem.
    "The disparities nationally are continuing," said Alan Fishbein at the Center for Community Change, a Washington, D.C., advocacy group. "Although the numbers of loans that have been made are up for African-Americans, the disparities between African-Americans and whites continue."
    Aggregate data for Erie County suggests that things are improving, but the overall data obscures poor records among a large number of lenders, critics say.
    In Erie County, one lender -- M&T Bank -- accounts for a large number of mortgage and home- improvement loans to blacks and Hispanics.
    M&T made 477 of the 1,391 mortgage, home-improvement and refinancing loans made to blacks in 1993. The next-best record was compiled by Key Bank and its mortgage subsidiary, with 173 loans.
    M&T made almost 30 percent of all minority mortgages throughout Western New York in 1993 and almost two-thirds of all minority home-improvement loans, said James Beardi, a senior vice president.
    The bank's biggest concentration of black lending occurred in the neighborhood east of Main Street bounded by Jefferson Avenue, East Delavan Avenue, East Ferry Street and Humboldt Parkway.
    M&T's lending to blacks for all home lending is dispersed, with pockets in the city's northeastern sector, new downtown housing tracts and inner city.
    M&T may distort the average of all lenders in the county because it has reduced its rejection level of black applicants to almost the same as for whites: In 1993, it rejected just 4 percent of blacks buying homes or refinancing mortgages, compared with 3 percent of whites.
    That record was a big improvement over 1991, when it took only 33 mortgage applications from blacks and rejected more than half of the applicants.
    Crime is big factor. 
Some observers believe that the lenders' efforts will not be enough to erase the differences between the numbers of loans made to blacks and whites because there are larger societal problems that reduce minority access to housing loans.
    "The city has been very difficult because of the crime," Evege said. "The banks are fair, and I think it is the economy more than any type of
discrimination. The market prices have dropped, and I think it is due to the increase in taxes and the economy and the crime."
    Real-estate professionals say lending to Buffalo's inner-city neighborhoods will not improve dramatically until underlying economic and social
conditions are improved.
    "It's not a question of racial prejudice at all," said Frank Parlato of Parlato Real Estate on Grant Street. "It's just that the areas hardest hit economically are predominantly minority neighborhoods, like the East Side and Lower West Side."


Innovative Approaches Boost Mortgages for Minorities

Buffalo News

News Business Reporter

January 30, 1995, Monday, City Edition

In a year when one out of every five blacks trying to buy a home in
Erie County was turned down for a mortgage, Omego Stafford and his family of five bucked the odds.
Stafford, his wife, Yolanda, and three children moved out of a subsidized apartment in 1993 and into their own four-bedroom home on Courtland Avenue, near Delavan and Bailey avenues.
Lillian Warren and her elderly aunt did the same thing, buying a house on Ruhland Avenue near Walden Avenue, even though they did not meet traditional income or credit standards.
Ms. Warren and the Staffords achieved their home ownership dreams through new programs designed by several local lenders to increase their lending to low-income home buyers. Their homes are in sections of the city that have benefited the most from the new lending policies.
Innovative approaches to lending have improved the minority lending records dramatically at several banks and mortgage companies.
M&T Bank, Erie County's largest lender, has enhanced its minority lending by combining minimal down payments, increased marketing in low-income neighborhoods and a willingness to make smaller loans, which it keeps in its own portfolio, rather than selling to investors, as do most lenders.
As a result, M&T's lending to blacks is spread throughout the East Side, starting with newly built neighborhoods near downtown and moving in a northerly direction toward the University at Buffalo City Campus.
M&T gave out at least half of the loans in 15 inner-city census tracts where it or the other banks made at least 10 loans, an analysis of lending patterns shows. The core area is bounded by Main Street on the west, Broadway to the south, Bailey Avenue to the east and East Delavan Avenue to the north.
M&T's efforts illustrate what lenders must do to increase their loans to minorities, fair housing advocates say. That is because the problem is more subtle than outright racism -- few believe that applicants are rejected solely because of their race.
"M&T's lending record has provided proof that if neutral underwriting criteria are used and fairly applied, that blacks are every bit as credit-worthy as whites," said Scott Gehl, executive director of Housing Opportunities Made Equal in Buffalo.
Credit rating holds key Minority applicants often do not fall into the "typical" borrower profile, which is slanted heavily in favor of the white middle-class borrower with a good income, steady job and good credit history, experts say.
The modern mortgage market has exacerbated the problem. Lenders no longer make mortgages and hang onto them; instead, they sell them to government-backed agencies that pool hundreds of mortgages and then sell pieces of those pools to investors. To reassure the investors, the mortgage pools demand that borrowers meet standardized criteria that often work against minorities.
Those standards do not fit low-income borrowers, who include a
disproportionate share of minorities.
"The key to the issue is credit," said Frank Parlato at Parlato Real Estate on Grant Street. "In many instances, these people have never owned a house before, and no one in their family has ever owned a house. For low-income people, it is very difficult to get into the mainstream of credit. Most of these people don't understand the credit system or how records are kept.
Many also have had legitimate problems in their life that have caused credit problems."
Despite past problems paying bills, many already handle high rental payments responsibly and would do the same with mortgage payments, experts said.
To sell inner-city homes to lower-income buyers, Parlato's firm has found it has to buy houses, fix them up, do credit counseling with individuals and let them move into the homes and accumulate down payments before applying for a mortgage.
Little money down Ms. Warren did not meet traditional credit standards because her husband's bankruptcy filing hurt her credit rating, even though she and her husband are separated. Her only income is a support payment from her husband, and her aunt's only income is a Social Security check.
She talked to Neighborhood Housing Services when she began looking for a suitable double home.
"Their program was pretty good," Ms. Warren said, "but with our income we didn't qualify."
She bought through Parlato and moved into her home -- without paying rent -- four months before the mortgage was granted. Now she shares the home with her aunt, her elderly father and several grandchildren. Parlato calls her "a stabilizing influence" for the neighborhood who inspires others to maintain their properties.
Although the Staffords had virtually no down payment, their first bid at home ownership was aided by a mortgage company seeking to increase its lending to low-income buyers.
Buying his own home "was always just a thought; basically the main fear was coming up with the down payment and closing costs," said Stafford, 34, food service manager at Longview Niagara, a family services center on Niagara Street. "I've talked about it with Realtors at one time or another, but they started throwing out fees. And I was told I wasn't in a certain
financial category, so pretty much I just gave up the thought."
Then Stafford talked to Parlato.
"They said that I was paying the same for rent as I would pay for a
mortgage," Stafford said. "He sat down and talked about my financial obligations, my credit obligations and so on and talked about my savings and spending habits and my priorities."
Stafford said he decided saving for a house was more important than buying"a pair of sneakers." In four months he saved $ 500 to buy the $ 42,000 house through a new program at PNC Mortgage Corp. of America that helps low-income applicants obtain mortgages.
John Young, who operates his own radio program on WHLD, decided he had to get his own place when his rented house on Goodyear Avenue was burglarized.
He had a problem, however.
"When I was younger, I abused my credit," he said. "As I got older, I tried to pay off everything."
He never declared bankruptcy -- "I don't believe in it," he said -- and he eventually managed to secure credit access by depositing money in a bank and using a credit card secured by the deposit.
Besides not having a perfect credit history, Young, 29, could not save the necessary down payment.
Finally, by working with Parlato and using a program for low down payments, he was able to buy a house on Keystone Avenue in the Bailey-Kensington neighborhood.
For $ 46,000 he got four bedrooms and 11/2 bathrooms.
"It's gorgeous," he said. "It's a quiet neighborhood with a majority of older people who keep the noise down. It is a family neighborhood, something I haven't seen in a while."
White families helped too Minority home buyers are not the only ones to benefit from these lending programs. White buyers with low incomes or no money for down payments also have gained easier access to loans.
Robert Hodas, a calibration technician at Niagara Gear, said he never thought he would own a home because his income did not allow him to save $ 7,000 to $ 8,000 for closing costs and a down payment.
He heard about a low down payment program administered by West Side Neighborhood Housing Services and found he was able to buy a $ 74,500 house on Bird Avenue with only $ 500 down. M&T made the loan.
"It's got five bedrooms and was built in 1904 -- it just takes your breath away," said Hodas, 45. "You put this house in North Buffalo, and it's a $ 135,000 home."
M&T and other lenders are looking beyond credit histories when dealing with low-income applicants, said James Beardi, a senior vice president.
"We ask, what are their other demonstrated successes; have they paid their rent; how are they handling their problems today?" Beardi said. "We have tried to find something to rely on to make us comfortable about the credit.
We are satisfying ourselves that we are making a riskier loan, but a loan we think is do-able."
Lenders who want to make more minority loans have to expand their definitions of credit risk, fair housing advocates say.
Buyers should be able to establish credit by presenting letters from
landlords, rental centers and utilities showing they have made regular payments, said Barbara Mervine, executive director of West Side Neighborhood Housing Services, which has developed lending programs with M&T.
Marine Midland Bank has adopted similar practices, said LuAnne Kingston, an executive vice president.
"We haven't reduced our underwriting standards, but we have made them more flexible," she says.
Are loans sound? Some lenders have thrown out the standard debt-to-income ratios used in determining whether an applicant qualifies for a loan because those standards are not applicable to low-income borrowers, said Donna Burge, senior vice president at PNC, an Illinois-based lender that has joined the ranks of Erie County's top lenders.
"We have found that lower-income people in higher housing cost areas often have to spend 50 to 60 percent of their income for housing costs in order to survive," she said.
Most major lenders also have begun to review rejected minority loan applications a second and third time in an effort to make the loan.
Key Bank improved its minority lending record because "we very actively and seriously pursued the second and third review of minority applications, where if the minority application isn't approved it is then further reviewed by a more senior person in the mortgage company," said Robert Bartkowski, community reinvestment officer for Key Bank in Buffalo. "If the
loan still doesn't meet secondary market rules, then we ask Key Bank to review it for possible purchase by the bank."
Some question how serious the banks and mortgage lenders are about the minority loan market.
One inner-city real estate agent who declined to be named worries about the future of the low down payment programs. Key Bank, for instance, committed a specific dollar amount to its program, and that money is used up, he said.
Key Bank plans to introduce "a new product that will be equally attractive and effective" in 1995, Bartkowski said.
Marine Midland already has exceeded the original limit on its low down payment program but is still offering it and will expand the program to include two-family homes, Ms. Kingston said.
Another real estate agent who asked to remain anonymous believes banks like M&T are making loans indiscriminately so that charges of biased lending cannot be raised to stop expansion plans. Community groups recently have used the Community Reinvestment Act, a federal law that requires banks to
invest in their own communities, to pressure expansion-minded banks into making additional lending commitments.
"M&T has a whole portfolio of loans that were definitely liberal and will end up in foreclosure," the agent said.
"That's silly," countered Beardi at M&T. "If it's not a good loan for the customer, it's not a good loan for the bank. You don't make any money if you end up having to deal with a problem or a foreclosure. We are taking risks, but we are taking them for the right reasons."
Critics also say few independent mortgage companies, which are bound by fair lending laws but not the Community Reinvestment Act, are making an effort to lend to minorities.
Outreach programs Some lenders say they are making efforts to reach out to minorities.
Sibley Mortgage Corp. in Rochester, which is one of Erie County's largest mortgage lenders, will start an outreach effort this year to find individuals not currently in the market for a home "but who potentially would be able to move toward home ownership," said Gregory A. Samp, Sibley's president.
"We want to extend that effort to people who get rejected now," he says.
"We want to make sure that does not send them away and make them feel that there is no hope."
Local banks have appointed urban loan officers to work in low-income city neighborhoods. Several are working through local Neighborhood Housing Services offices, which provide home ownership seminars, credit counseling and referrals to lenders, said Nancy Fohl, interim director of Buffalo Neighborhood Housing Services.
A pilot program at PNC seeks to prevent borrowers who have missed mortgage A payments from losing their homes. It offers financial counseling and a refinanced mortgage at a lower interest rate to borrowers who miss payments because of isolated events such as loss of income or divorce.
Rose Ciotta, The News' specialist in computer-assisted reporting, gathered and analyzed data for this story.


It's unfair to blame developer for homeowner's misfortune

Buffalo News

By Frank Parlato Jr.

August 21, 1999

The Aug. 16 News article "Woman's dream home turns nightmarish" told the story of Juanita House, who bought a home on Woltz Street in 1995.

She was portrayed as a victim of the Department of Housing and Urban De
velopment, the bank that financed her and the developer who sold her the house.
While I am truly sympathetic to her plight, as the developer mentioned in the story, I want to state emphatically that I did not victimize her and I strongly suspect neither did anyone else.
The article mentioned that Ms. House fell behind on her mortgage payments, approximately $300 per month, including taxes and insurance.
The article alleged, "It's the story of a developer who sold her a house she couldn't afford."
I want to rebut this with words from the same article: "Shortly after buying the house, (Ms. House's) mother died, and her son was taken off Supplemental Security Income.
Her mother co-owned the house and was helping to pay the bills."
How is the developer to blame for selling her a house she couldn't afford, when the house was sold to both her and her mother? Ms. House and her mother were well-qualified and the bank (not us) approved their loan. To state that we sold her a
house she couldn't afford implies we should have know beforehand that her mother would die or her son would lose his benefits. The allegation is totally absurd.
We also come in for blame because the furnace broke down two years after she bought the house.
First, readers should be aware that this was not a new home, but rather a 90-year-old, $30,000 house. It was never warranted to be forever repair-free. In fact, the contrary is true: Ms. House was told by the lender that she must budget for regular maintenance and repairs. Second, before Ms. House bought her home, it was
inspected by a HUD appraiser who approved the condition of the house — including the furnace, which was in good working order.
The reality is that Ms. House's "nightmare" was not caused by us or HUD, but rather by the loss of family income.
The story also contained a factual error, reporting that HUD "banned" our business for one year. We entered into a voluntary agreement with HUD, which cannot be
characterized as a "ban." This was a "one-year voluntary exclusion." A "ban"
has a negative connotation, is usually unilateral and implies guilt. A "voluntary ex-
elusion," however, with the clause"with no admission of liability or wrongdoing by either party," gives a window for the presumption of innocence.
Finally, the article stated that the "ban" expired and we were "now back in business." This implies we were out of business for a time. That' is untrue. Since we opened our doors in 1941, our company has never been out of business. True, we voluntarily
stopped working with HUD. But. since there are thousands of non-HUD lenders, we continue as strong as ever.
We are weary of the misstatements being passed along to the pub-:.lie as fact. Based on this, the public" draws conclusions that are unfair and' untrue. Precisely because of this, we no longer service the inner city, for it is only there that one can get blamed
for a woman's mother dying, or for her furnace breaking two years after she bought the house. In other areas, people are presumed responsible for their actions.
Still, I feel our departure from the inner city is a loss because we were doing something that few were willing to do — trying to give home owner-ship opportunities to low-income peo-ple.
As for Ms. House, with her late fees waived, she can save her home. Indeed, she is quoted as saying she "loves" her house, and that is testimony in our favor. Very few developers would have worked with her in the first place and found her a home
she "loves." Ms. House should be a success story and, thanks to HUD, she may be. So we wish her good fortune in the future. And when she does succeed, like it or not, she can thank us: We believed in her first.

FRANK PARLATO JR. and his family
own Parlato Real Estate.
For writer guidelines for columns
appearing in this space, send a
self-addressed, stamped envelope to
Opinion Pages Guidelines, The Buffalo
News, P.O. Box 100, Buffalo, N.Y.

Parlato makes a comment on Flipping Article


By Frank Parlato Jr.

December 18, 2001

The article by Aquira Adisa on Flipping was interesting, and, since it mentions my name, I hope you won’t mind if I add something to the discussion.

I buy houses and sell them for a profit. I am not a charity organization, although, if Saint Paul is right, charity is the greatest, and, as some say, charity begins at home. Which is what I sell to people. A home.

I know how to fix, how to sell, and especially how to buy them. In fact, they sell as fast as I can fix them. I don’t have to advertise much.

I have, however, garnered criticism in the past and I always like to listen to criticism and try to correct myself where I can.

In doing this, however, I am not ignorant of the fact that some of the criticism was based on the desire of some people not to see people of a different race own homes in their neighborhoods. I am not unaware that real estate in Buffalo is affected by race. But I cannot obey anybody’s wishes that I sell only in certain neighborhoods.

I intend to buy more houses in Buffalo, and sell them for a profit. The houses I sell I hope will be the very best deal for me, and for the man or woman who buys one. We’re not quite what mediocre minds conceive us to be. With the greatest fresh water frontage in the world in our region, real estate in Buffalo could someday be quite valuable.

In the meantime, I’ll bet there are 5,000 people in this city of 292,000 who are tenants who could qualify to own a home. And 10,000 more who, with a little guidance, could become home owners in one or two years. Consider also: the housing stock is plentiful; although old, it was built with solid timber to last 300 years. If Buffalo went from rich to bankrupt in 100 years, it can be rich again - with the same houses.

Yet, today, tens of thousands of homes are in need of vital repairs. Because of current bankrupt values of Buffalo real estate, many are not worth the money to fix, and, with each passing year, this stock of vacant, century- old housing is ever less likely to be occupied. Some will be demolished - perhaps to green the city. But some, quite frankly, I hope to buy, fix, and sell - for a profit. Others can do the same.

Imagine what would happen if home ownership became a central drive of the people and their resources in Buffalo.

A city could resuscitate itself on this alone; getting 5,000 (qualified) tenants to become the owners of 5,000 currently vacant (fixed up) dwellings.

So why, someone asks, did so many people citywide lose their homes (including some of the people you sold houses to?) The city collapsed. That’s why. 600,000 became 300,000, and the city’s finances went into collapse, and people fell into poverty, lost jobs, lost security from crime; the market plummeted. Many lost their homes. What did you expect? People lost their homes because of poverty.

By the way, and it should be mentioned, at the behest of my critics, there was a government investigation of my family’s real estate business. The US Attorney, HUD, the FBI, The Inspector General, and NY State Dept of State participated. It concluded in this: no sanctions, no charges, no proof of any wrongdoing. Nothing illegal. No illegal flipping. Nothing! And this at both the State and Federal level. Innocent unless proven guilty. Parlato Real Estate was established in 1941 and is still in business. With a waiting list of buyers.

So on this microcosm, a city can be built, and a city is not "builded" in a day, one knows. Take an ad: Home owners wanted in Buffalo. Opportunity abounds. Work for many, homes for many. Investors wanted, black or white.

I plan to be one of them.


High foreclosure rates discussed on East Side

Buffalo News

News Staff Reporter

June 20, 2002

Countrywide Home Loans, one of the largest mortgage companies in the country, sent several executives to meet with East Side neighborhood leaders today after a national report last month listed Countryside as having the worst subsidized loan foreclosure rates in Buffalo.

Neighborhood advocates say irresponsible lending practices by Countrywide and other groups have led to high foreclosure rates and abandoned properties that continue to plague the East Side. And now, they want Countrywide to make amends.

"We're glad they're making the first step by meeting with us," said James Grice, an Eastside PRIDE board member. "Hopefully they'll come up with a plan so that this stuff doesn't happen anymore, and to help some of the families whose lives have been on hold because of this."

According to the report by the National Training and Information Center, Countrywide had a citywide default rate of 34 percent on loans backed by the Federal Housing Administration. That means more than one out of every three families ended up on the road to losing their homes.

Members of Eastside PRIDE took a closer look at the report data and said that homeowners living in specific East Side zip codes defaulted on 59 percent of the FHA loans approved by Countrywide.

Moreover, they said, many of those loans were made in conjunction with real estate broker Frank Parlato Jr. and through brothers Charles and William King, all three of whom have been investigated for "flipping" practices—reselling low-value properties at inflated prices.

"Had they not done business with Parlato and the King brothers, their foreclosure rate would not look too bad," said PRIDE Director Kim Harman.

Countrywide laid the blame for its high foreclosure rates on Parlato, stating that his alleged flipping practices in the mid-1990s victimized both home buyers and lenders alike. The mortgage company has intervened to assist a number of Parlato victims, the company stated.

Parlato, who has been heavily scrutinized but never found guilty of any wrongdoing, strongly denies Countrywide's accusations.
The Kings were fined and sentenced to home confinement for six months after pleading guilty to their role in a flipping scam last year.

Today, PRIDE members planned to take Countrywide administrators on a tour of Fillmore District neighborhoods and show the damage caused by the foreclosures. They also are pushing Countrywide officials to adopt a series of recommendations to address the neighborhood damage and prevent future occurrences. Among the recommendations developed by PRIDE: a six-month moratorium on foreclosures connected to real estate scammers; paid reappraisals on homes affected by fraudulent real estate practices; paid relocation expenses for families that have lost their homes due to fraud; credit repair letters for real estate victims; and an ongoing partnership with Eastside PRIDE.

Countrywide officials said they see today's meeting as the start of a long and fruitful process.

e-mail: stan@buffnews.com