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Access to safe, affordable housing threatened

CHARLENE CROWELL | 2/19/2018, 5:08 a.m.
In recent days, threats to the nation’s housing finance system have emerged. At the center of the controversy are two ...
Charlene Crowell

Center for Responsible Lending

In recent days, threats to the nation’s housing finance system have emerged. At the center of the controversy are two key issues: the obligation of mortgage lenders to ensure broad mortgage credit for all credit-worthy borrowers, and secondly, whether the nation will enforce its own laws banning unlawful discrimination.

On Feb. 2, a leaked Senate proposal to overhaul the secondary mortgage market’s government-sponsored enterprises, Fannie Mae and Freddie Mac, would drop important access and affordability provisions that now govern the system. For example, the GSEs now are required to always serve all markets, as well as have in place affordable housing goals.

The proposal from U.S. Senators Bob Corker of Tennessee and Mark Warner of Virginia was quickly and unanimously rejected by a broad coalition of civil rights and housing advocates that included: the Lawyers’ Committee for Civil Rights Under Law, Leadership Conference on Civil and Human Rights, NAACP, UnidosUS – formerly the National Council of La Raza, National Coalition for Asian Pacific American Community Development, National Fair Housing Alliance, National Community Reinvestment Coalition, National Urban League, and the Center for Responsible Lending.

“Ten years after the 2008 Housing Crisis, it is disheartening to turn the secondary mortgage market back over to Wall Street,” wrote the coalition. “Who can forget the 7.8 million completed home foreclosures and trillions of dollars in lost family wealth?”

“Many American still face immense housing challenges,” the leaders continued. “This ill-conceived approach places the risk on the backs of hardworking families who already rescued the big banks.”

The draft legislation also fell short for Massachusetts Senator Elizabeth Warren, a member of the Senate Committee on Banking, Housing and Urban Affairs.

“I appreciate the dedication Senators Warner and Corker have shown to address this critical issue, but this draft isn’t even close to a solution that works for families who hope to buy homes, said Warren. “This bill would end up creating more problems than it solves.”

As early as 2008, Congress moved swiftly to enact the Housing and Economic Recovery Act. This bipartisan legislation provided strong regulatory oversight of the housing finance system and brought forward important affordable housing goals to ensure that hard-working families would be able to access mortgage loans. But with the housing market’s lengthy path to recovery, many have renewed calls for legislative reform of Fannie and Freddie. And just as the GSEs are now pledged to serve the entire market, some want to take way to take away the system’s access and affordability requirements. That kind of change would harm Black families and communities, as well as other low-wealth families.

“The big-ticket items that we are looking for is the national duty-to-serve and affordable housing goals that have a regulator able to enforce those,” said Scott Astrada, CRL’s Director of Federal Advocacy.

Days later, on Feb. 5, Mick Mulvaney, the White House hand-picked Acting Director for the Consumer Financial Protection Bureau announced he would move the Bureau’s staff for its Office of Fair Lending and Equal Opportunity directly under his control.