#165 Spring 2011 — Fair Housing

NCRC Files Fair Lending Complaints

The National Community Reinvestment Coalition has filed complaints with HUD against dozens of lenders who have set minimum borrower credit scores as high as 640 for Federal Housing administration (FHA) […]

The National Community Reinvestment Coalition has filed complaints with HUD against dozens of lenders who have set minimum borrower credit scores as high as 640 for Federal Housing administration (FHA) loans, even though FHA guarantees loans to borrowers with scores as low as 580.

NCRC claims that this practice, known as credit overlays, “violates this nation’s commitment to fair lending, sustainable home-ownership, and meeting the credit needs of all communities,” and is in violation of the Fair Housing Act, the Equal Credit Opportunity Act, and the Community Reinvestment Act. The claim accuses a majority of the top 50 FHA lenders of discriminatory conduct, saying the overlays disproportionately affect — and were disproportionately applied to — otherwise responsible Latino and African-American borrowers.

In February, as a result of its campaign, NCRC announced that Wells Fargo and Quicken Loans had agreed to reform their policies. Discussions with other lenders are underway. “There’s no good business excuse for this practice,” says NCRC’s Jesse Van Tol. “The loans are 100 percent guaranteed, and the lender is only at risk for their own underwriting errors. This is a critical civil rights and fairness issue affecting our communities.”

OTHER ARTICLES IN THIS ISSUE

  • A Windfall for Los Angeles Landlords “Burdened” with Rent Control

    March 30, 2011

    A Los Angeles councilman says rent control places undue burdens on landlords and proposes a plan to reduce their tax burden.

  • The Rising Tide of Bank Protests

    March 30, 2011

    Despite Dodd-Frank and the Consumer Financial Protection Bureau, distrust for the banking industry in the United States remains palpable, and now we’re beginning to see a sustained, organized counterattack. Bank […]

  • Integrating Schools Is a Matter of Housing Policy

    March 30, 2011

    Inclusionary zoning and economic integration in suburban neighborhoods not only reduces concentration of poverty, it directly improves low-income children’s academic achievement.