Ed Gorman of the National Community Reinvestment Coalition wrote in an email to supporters:
The U.S. Department of the Treasury recently released a report to Congress outlining three options for the future structure of the housing finance system. Panelists will discuss current challenges facing mortgage lending and the impacts of potential changes to housing finance on access to credit for affordable housing, rental housing, traditionally underserved groups, and more.
The report, Paying More for the American Dream V: The Persistence and Evolution of the Dual Mortgage Market, examines changes in conventional refinance lending between 2008 and 2009 in seven metropolitan areas: Boston, Charlotte, Chicago, Cleveland, Los Angeles, New York City and Rochester, NY. It also compares 2009 loan denial rates across neighborhoods.
It also compares 2009 loan denial rates across neighborhoods. In all seven cities analyzed, lenders denied loan applications at significantly higher rates in communities of color than in predominantly white neighborhoods. The report concludes with policy recommendations to improve access to sustainable credit in communities of color.
press release | briefing (mp3)
As a deregulatory philosophy took hold of Washington in the early 2000s, prudent supervision of the mortgage market broke down. Predatory loan products edged out sustainable ones in low-wealth communities, presaging the foreclosure crisis that destroyed billions of dollars of equity. As private securitizers took on more and more risk, Fannie Mae and Freddie Mac lost sight of their mission and engaged in a destructive race to the bottom.
State officials in Illinois are taking action to make sure that servicers are complying with due process requirements when preparing foreclosure filings.
Through a series of “secret shopper” investigations, NCRC discovered that many of the top 50 FHA lenders would not offer home loans to borrowers with scores between 580 and 620. A large percentage of people of color fall into that range of scores.