Sustainable Homeownership: Market and Policy Implications for Communities
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The principal objective of this project was to identify the causes of foreclosure among Latinos and to present potential proactive solutions to the problem. Special emphasis was placed on identifying specific lending products and underwriting guidelines that best meet the needs of Latino borrowers. Focus group participants consistently expressed the need for flexible loan underwriting and products to meet the unique needs of the Latino community, such as nonstandard means for determining income, alternative credit use, down-payment assistance and verified cash income. The tightening of credit in response to increased foreclosures threatens the availability of loan products that are particularly useful to Latino borrowers. The abuse of flexible products, not the products themselves, was cited by participants as the cause of problems. Abusive practices mentioned included overstating income to qualify for a home rather than verifying undocumented earned income or placing borrowers in products whose future payments they cannot afford.
To ensure that the needs of Latino clients are met and the integrity of the homebuying industry is upheld, collaborative solutions to foreclosure must be sought. Partnership among housing counseling agencies and real estate agents, mortgage brokers and lenders is essential to support sustainable homeownership in Latino communities.
Published: October 1, 2007
Source: Congressional Hispanic Caucus InstituteNeighborWorks America
Author: --
Categories: Mortgage Lending
