WASHINGTON, DC – (RealEstateRama) – Yesterday, in response to a Presidential Memorandum on Federal Housing Finance Reform, the U.S. Department of Treasury and U.S. Department of Housing & Urban Development released recommendations for reform of the nation’s housing finance system.
The National Urban League, Center for Responsible Lending, Leadership Conference on Civil and Human Rights, NAACP, National Coalition for Asian Pacific American Community Development, National Fair Housing Alliance, UnidosUS (formerly the National Council of La Raza), National Community Reinvestment Coalition, and the NAACP Legal Defense and Education Fund, Inc. released the following joint statement:
The Administration’s proposal will increase the cost of mortgages for all borrowers, especially families of color, low- to moderate-income families, and rural families whose income growth has been surpassed by housing costs for homes as well as rental markets across the country.
Adding new private guarantors to the housing finance system and privatizing Fannie and Freddie would not only increase costs, but will incentivize guarantors to chase the most lucrative markets and serve only the most profitable borrowers or regions of the country. Such a scenario would enable taxpayer-backed companies to evade their duty to serve the entire market, including urban and rural areas.
Today, families of color lag far behind wealthier and white communities that were advantaged by lending discrimination supported by our federal government’s lengthy history of mortgage policies and private actions that led to vast disparities in homeownership and in wealth. For example, the Census Bureau has found that 73.1% of white households are homeowners as compared to 47.4% for Latino households, 40.6% of black households, and 41% for Asian American Pacific Islander households.
Changes to the system must build upon the GSEs’ important public mission, including support for the GSEs’ existing duty to serve mandate and the affordable housing goals. Furthermore, any plan for reform must recognize that much more needs to be done to bolster affordable housing, including by the GSEs. Fair lending requirements must be strengthened and fully enforced. Any effort to weaken existing requirements under the guise of ‘efficiency’ is a nonstarter.
As organizations representing the majority of future homebuyers, including many communities of color and low-to-moderate income (LMI) families that have traditionally been underserved in mortgage lending, we are committed to ensuring that any effort to restructure GSE operations builds on the critical affordable housing reforms adopted since the 2008 financial crisis.
It is our nation’s long and unfortunate history of excluding communities of color from sustainable credit and homeownership opportunities’ that demands civil rights organizations to be prominently engaged in this housing finance reform debate.
Additionally, in a September 4 letter to Lawrence Kudlow, the Director of the National Economic Council (NEC), the National Urban League, Center for Responsible Lending, The Leadership Conference on Civil and Human Rights, NAACP, National Coalition for Asian Pacific American Community Development, National Fair Housing Alliance, UnidosUS (formerly the National Council of La Raza), and the National Community Reinvestment Coalition identified principles that together – if implemented – would help overcome persistent barriers in accessing mortgage credit while also protecting taxpayers.