New Loan Safeguards Leave Path for Higher-Risk Borrowers

January 22, 2014
Bloomberg 
mortgage lending news
As regulators tighten mortgage rules and big banks balk at lending to riskier middle-income Americans, state housing-finance agencies (HFAs) are stepping up to restore the fading dream of homeownership. “First-time buyers have not been participating in the market recovery,” according to National Association of Realtors chief economist Lawrence Yun. “Housing-finance agencies could provide a channel for these buyers.”

The entities got a lift from the Consumer Financial Protection Bureau, which gave them a pass on stricter mortgage regulations that took effect this month.

Wells Fargo, the biggest U.S. home lender, already is doing business with HFAs; and Quicken Loans Inc., the fourth-largest originator last year, is looking to build relationships with them. "The question is, if the industry gets really interested in this and wants to expand lending, are the HFAs ready for this influx?" asks Ben Olson, who helped write the CFPB guidelines before leaving the bureau in May.









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