Home Loans:
the Future of Homeownership

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Until recently, mortgages were almost always a good thing for families. But when the aggressive marketing of reckless loans became routine in the subprime market, too many mortgages became destructive, both for vulnerable communities and the entire economy. CRL conducts mortgage research, monitors foreclosure trends, and advocates for stronger policies to help strengthen the mortgage market and encourage fair and sustainable home loans.

Fast Facts

Fast Facts--Home Loans

61% of subprime loans made in 2006 went to people with credit scores high enough to qualify for a loan with better terms.
For many loan types, borrowers of color were 30% more likely to receive a higher-rate loan than white borrowers, even after accounting for income and credit.
Fannie Mae/Freddie Mac financial losses came mostly from “Alt-A” mortgages, non-traditional loans which are not connected with affordable housing.
94% of subprime loans were made by entities not subject to requirements under the Community Reinvestment Act.
Since early 2007 more than 7.5 million homes have entered the foreclosure process.
Amherst Securities projects that more than 10 million foreclosures are still ahead.
One out of every five homeowners is at serious risk of foreclosure.
White homeowners have experienced the majority of foreclosures, but African Americans and Latinos are affected disproportionately.
American homeowners have lost 1.86 trillion in home equity, about $20,000 per household.
CoreLogic reports nearly 11M homes—22.5% of households with a mortgage—are underwater, owing more than the home is worth.
With the new Dodd-Frank rules, lenders must now consider a borrower’s ability to repay a mortgage before approving the loan.
Regulators are considering rules that would require borrowers to put down as much as 20% when buying a home.
Based on median salaries, an elementary school teacher would need nearly 20 years to save enough to make a 10% down payment on a median-priced home.

More Fast Facts

What Are The Problems?

Now that Dodd-Frank rules are in place, many of the lending abuses that caused the housing crisis are now illegal. The most pressing problem today is the stagnant housing market. There are three distinct issues.

The continuing flood of foreclosures
Lending that is too restrictive for qualified working families
Ensuring that lenders have capital to make mortgages (i.e., the future of Fannie Mae and Freddie Mac)

What Are The Solutions?

Strong foreclosure prevention.
No mandatory down payment requirements. (good QRM rules)
A continuing government role in supporting the mortgage market

For more information please visit our policy page.

Foreclosure Central

We know the foreclosure crisis started with bad subprime loans and then infected the entire market. The big question is, how will it end? Here we have collected foreclosure facts, research, trends and solutions. Also, find out more about robo-signing and other mortgage servicing abuses..

Mortgages of the Future

The issues policymakers are debating today will determine the shape of the mortgage loan market for years to come. Some of the central issues before us include the fate of the government-sponsored enterprises (Fannie Mae and Freddie Mac), down payment requirements (defining “qualified residential mortgages”) and the future of the Federal Housing Agency (FHA).