FHFA drops debt-to-income based pricing adjustment

Source
Brad Finkelstein | National Mortgage News
Using DTI "can unfairly penalize lower-wealth but purchase-ready Black and Latino borrowers, which perpetuates the racial homeownership gap," according to a statement from Mike Calhoun, president of the Center for Responsible Lending. "We look forward to providing input to the agency on a process for setting single-family guarantee fees that will help eliminate barriers that prevent low-wealth borrowers from purchasing a home, while ensuring the housing Enterprises remain appropriately capitalized."

Why Republicans Are Upset About Mortgage Fees

“People are focused on the changes to the fees rather than the resulting fees,” said Michael Calhoun, president of the Center for Responsible Lending, a Durham, North Carolina-based nonprofit research and policy organization. Calhoun noted that borrowers making low down payments face even higher costs, because they’re required to pay for private mortgage insurance if their down payments amount to less than 20% of the value of their home purchase — a fact Republicans have ignored. “They’re tossing things up against the wall and when you dig into it, there’s no there there,” Calhoun said. “In

Fintech’s Latest Scheme

Source
Jaron Facundo | The American Prospect
The fintech industry’s maneuvering could circumvent strong state-level protections for interest on consumer loans. For example, Vermont caps single-loan interest rates at 18 percent. Monica Burks from the Center for Responsible Lending testified before lawmakers over a bill that would carve out EWA products from the 18 percent limit. Referring to EarnIn’s tipping model and expedited service fees, she said, “This is actually strong evidence that their business model depends on loans for which the true cost is often going to be higher than advertised or disclosed, with an APR that would well

The problem with Apple’s big banking push

Source
Sara Morrison | Vox
“Currently, there are no requirements for underwriting for buy now, pay later,” Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, said. “So there’s no analysis required — although some companies do — about whether this person has the ability to repay this loan.” According to the Consumer Financial Protection Bureau, BNPL services approved 73 percent of applicants in 2021, and 10.5 percent of people who took out those loans paid a late fee. Chabrier said BNPL users tend to be younger, to have worse credit, and to be people of color. They’re also more likely to

How to Get Out of a Payday Loan Nightmare

Source
Jackie Veling | NerdWallet
"Even when people feel like they're making progress, they're not actually paying down their loans," says Yasmin Farahi, deputy director of state policy and senior policy counsel at the Center for Responsible Lending in Durham, North Carolina. "That's how the cycle continues. They're paying some amount, but it's not enough to get them out from under this."

Lower mortgage fee will help some buyers with Fannie and Freddie loans

Source
Samantha Fields | Marketplace
This change is designed to save lower-income buyers money, according to Mitria Spotser at the Center for Responsible Lending — often a few thousand dollars’ worth, which is enough to make the difference for some people. “It expands access by making homeownership more accessible to a broader scope of folks,” she said.

Center for Responsible Lending Warns CUs, Public of Threat to CFPB

Source
Jim DuPlessis | Credit Union Times
A bill being marked up by the House Wednesday is called the “CFPB Transparency and Accountability Reform Act,” but it reminds the head of the Center for Responsible Lending of the attempt in 2017 to shut down the bureau. The CFPB was created in 2010 to enforce provisions of the Dodd-Frank Act, which Congress passed to prevent abuses that contributed to the financial meltdown in 2007 that led to the Great Recession.

Morning Money: In Defense of CDFI Changes

Source
Zachary Warmbrodt | Politico Morning Money
In defense of CDFI changes — The Center for Responsible Lending pushed back on last week’s MM item about Arkansas Republicans who said rural lenders would be hurt by Treasury’s planned rule revamp for Community Development Financial Institutions. CRL policy counsel Andrew Kushner said: “Treasury’s plan for certification of Community Development Financial Institutions merits strong support. The plan appropriately prevents CDFI designation from going to bad actors that engage in predatory financial practices like lending above 36 percent APR or issuing unaffordable mortgages like those that