Housing accounts for almost 20% of our national economy. Disruptions in the housing sector will have a ripple effect across the economy. This crisis lays bare wealth and income inequality, including the racial wealth gap, that worsened in the last crisis and the structural flaws in our economy that produce this inequality. Actions must be taken now to protect financially vulnerable families most impacted by the crisis. Download the policy recommendations. (PDF)
Home ownership has been the primary means for most American families to build and pass on inter-generational wealth. However, government-sanctioned racial discrimination in housing and mortgage finance markets robbed many families of this opportunity, and today’s racial homeownership gap is barely changed from the levels of more than 50 years ago. Closing the homeownership gap is essential to closing the racial wealth gap. Additionally, predatory mortgage lending practices drained trillions in wealth from families, especially Black, Latino, low wealth and low-income Americans. CRL successfully advocated for the Dodd-Frank Wall Street Reform and Consumer Protection Act, which has made the mortgage market far safer for consumers. CRL is building on this progress by working to ensure that all credit-worthy borrowers have access to fair, affordable, and sustainable mortgages. And that policy makers and market participants develop solutions that are appropriate to respond to the scale of this housing crisis.
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If Treasury and FHFA release the GSEs from conservatorship, they should continue the return-regulated approach FHFA has used effectively in conservatorship. Utility-like regulation would allow the GSEs to continue to operate at low risk and in a way that provides broad access to affordable mortgage credit nationwide. Removing that check on GSE returns on equity would lead to greater risk and less systemic stability, less pooling of risk and access to credit, and higher prices for America’s homebuyers. Download the full report above or download a 2-page factsheet . Utility-like regulation will...
Deregulatory measures are not the antidote to the affordable housing crisis in our nation. The government must provide the necessary investments to combat the crisis and ensure that potential regulatory changes enhance equity, not detract from it. HUD and the White House Council must not use the RFI process to undermine important public interest protections, such as civil rights, labor, environmental, and public health.
Yesterday, the FDIC and OCC released their notice of proposed rulemaking (NPRM) for changes to the Community Reinvestment Act (CRA). This proposal utterly fails to achieve what were supposed to be the primary objectives of rule changes: greater clarity for lenders and better results for low- and moderate- income communities and people of color. It ignores the recommendations of our groups for changes that would bring safe and affordable credit to lowand moderate-income neighborhoods, including communities of color, that are bombarded with abusive and toxic lending. The proposal fails to...
The proposed rule will have a toxic effect on the mortgage lending industry. The Fair Housing Act’s disparate impact doctrine has played a critical role in making fair housing available to all, while at the same time making the lending industry better at evaluating creditworthiness. A ban on unjustified disparate impact has encouraged the lending industry to systematically scrutinize its procedures and requirements to ensure that lenders more precisely measure creditworthiness and lending practices do not have unnecessary discriminatory impact. Thus, financial products are more widely...
"As pastors and faith leaders, our sacred text teaches us to care for our neighbors and see the dignity of all of God’s people. Of all the issues confronting Americans, none is more basic than that of housing. Whether renting or owning a home, every family needs a place to come home to at the end of the day. It is where our children are raised, meals are prepared, and family milestone moments are celebrated. " Continue reading the comment letter. (PDF)
The Center for Responsible Lending (CRL), The Leadership Conference on Civil and Human Rights, NAACP, National Urban League, and UnidosUS appreciate the opportunity to respond to the Consumer Financial Protection Bureau’s (CFPB or Bureau) Advance Notice of Proposed Rulemaking (ANPR) on the Qualified Mortgage (QM) definition under the Truth in Lending Act (TILA) and Ability to Repay / Qualified Mortgage regulation (ATR/QM). Our comment refers to a paper published by CRL entitled A Smarter Qualified Mortgage Can Benefit Borrowers, Taxpayers, and the Economy (July 2019). Rather than repeat...
From the letter to the director of the National Economic Council, Lawrence Kudlow: As you consider proposals to restructure our nation’s housing finance system as required by the March 2019 Presidential Memorandum,1 the undersigned civil rights organizations write to express our collective view that any effort to comprehensively reform Government Sponsored Entities (GSEs)—Fannie Mae and Freddie Mac—must recognize the importance of preserving and strengthening access to stable, affordable, and equitable homeownership opportunities for all American families. We view failure to maintain these...
In the Dodd-Frank Act, Congress required lenders to make a reasonable and good faith determination that the borrower has the ability to repay a mortgage loan (ATR) before the loan is made. It also created a category of loans, called Qualified Mortgages, or QM, that are presumed to comply with the ATR requirement given product and borrower credit characteristics that make the loans lower risk. The product protections for a loan to be considered a QM are outlined in the Act, and the credit characteristics are left to the Consumer Financial Protection Bureau (CFPB) to determine. In setting the...
Homeownership is the primary way that most middle-class families build wealth and achieve economic stability. Wide access to credit is critical for building family wealth, closing the racial wealth gap, and for the housing market overall, which in turn, contributes significantly to our overall economy. Today, the opportunity to purchase, maintain and refinance a home has not reached significant portions of low-to- moderate income families and people of color. As a result, these families lag far behind wealthier and white communities that received a head start due to historical lending...