A number of advocacy groups -- the Center for Responsible Lending, NAACP, the National Council of La Raza, and the National Fair Housing Alliance, among them -- have come together to protest legislation that would revamp the nation's residential finance system.
They argue that a bipartisan bill from Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho) would come at the expense of minority and lower-income households, whose access to credit could be narrowed. "The new Senate proposal to reform the housing finance system would needlessly make mortgages more expensive and less available," the organizations warned in a joint press release, which also complained that the measure "lacks provisions to ensure that the housing finance system is fair and non-discriminatory."
The Johnson-Crapo plan would capitalize several affordable trust funds and offer incentives for lenders to work in underserved areas, but it would end affordable housing goals put in place under Fannie Mae and Freddie Mac. It also outlines lending criteria, including down payment requirements of 3.5 percent for first-time buyers and 5 percent for others, for mortgages to be included in a federally insured security.