{"id":3245,"date":"2021-11-23T18:38:00","date_gmt":"2021-11-23T18:38:00","guid":{"rendered":"https:\/\/nationalfairhousing.org\/?p=3245"},"modified":"2021-12-10T18:41:02","modified_gmt":"2021-12-10T18:41:02","slug":"nfha-and-advocates-urge-the-federal-housing-finance-agency-to-adopt-a-regulatory-capital-framework-that-promotes-racial-equity","status":"publish","type":"post","link":"https:\/\/nationalfairhousing.org\/nfha-and-advocates-urge-the-federal-housing-finance-agency-to-adopt-a-regulatory-capital-framework-that-promotes-racial-equity\/","title":{"rendered":"NFHA and Advocates Urge the Federal Housing Finance Agency to Adopt a Regulatory Capital Framework That Promotes Racial Equity"},"content":{"rendered":"\n

FOR IMMEDIATE RELEASE<\/p>\n\n\n\n

November 23, 2021<\/p>\n\n\n\n

Contact: Izzy Woodruff | 202-898-1661 | IWoodruff@nationalfairhousing.org<\/a><\/p>\n\n\n\n

NFHA and Advocates Urge the Federal Housing Finance Agency to Adopt a<\/strong> Regulatory Capital Framework That Promotes Racial Equity<\/strong><\/p>\n\n\n\n

Washington, D.C. \u2014 The National Fair Housing Alliance (\u201cNFHA\u201d) and leading civil rights, housing policy, and consumer advocates have submitted a comment letter<\/a><\/u><\/strong> to the Federal Housing Finance Agency (\u201cFHFA\u201d) in response to its Request for Comment<\/strong><\/a> on a Notice of Proposed Rulemaking (\u201cProposed Rule\u201d) regarding the Enterprise Regulatory Capital Framework for Fannie Mae and Freddie Mac (the \u201cGovernment-Sponsored Enterprises\u201d or the \u201cGSEs\u201d).<\/p>\n\n\n\n

\u201cWe applaud FHFA\u2019s direction in this Proposed Rule. The GSEs\u2019 Regulatory Capital Framework is critically important because it affects the pricing and availability of mortgage credit at a time when the Black\/White homeownership gap is as wide as it was prior to passage of the Fair Housing Act,\u201d said\u202fNikitra Bailey, NFHA\u2019s Senior Vice President of Public Policy.<\/strong> \u201cToday, families of color lag far behind wealthier and White communities that were advantaged by lending discrimination supported by our federal government\u2019s lengthy history of mortgage policies and private actions that led to vast disparities in homeownership and wealth. The GSEs must build out their important public mission, including increasing credit access for borrowers of color and other protected groups. The GSEs should also eliminate LLPAs, which have a disparate impact on borrowers of color. LLPAs must be replaced with less discriminatory alternatives that do not unfairly increase the cost of mortgage loans for communities of color.\u201d<\/p>\n\n\n\n

FHFA needs to act swiftly to move the GSEs toward greater equity as the Federal Reserve Board\u2019s $40 billion per month in agency mortgage-backed securities is exacerbating racial wealth and homeownership gaps. The Federal Reserve\u2019s actions have helped existing homeowners to see their home equity grow by more than $2.9 trillion dollars since the second quarter of 2020. Additionally, the Federal Reserve\u2019s actions to mitigate the economic impacts of COVID-19 resulted in lowering the federal funds rate, which helped mortgage interest rates remain at historic lows and stimulated home purchasing and refinancing. However, Federal Reserve researchers found that these benefits did not benefit the whole housing market equally. The analysis showed that the median Black and Latino mortgage borrowers accumulated significantly less equity. Moreover, only six percent of Black borrowers and nine percent of Latino borrowers refinanced, as compared to 12 percent of White borrowers. <\/p>\n\n\n\n

Given these continued disparities in the housing finance market and the statutory mandates, FHFA\u2019s Proposed Rule should not allow the GSEs to emerge from conservatorship with the existing low levels of loan purchases to borrowers of color, even though the Federal Reserve\u2019s support caused the GSEs\u2019 balance sheets to expand considerably. Ensuring a fair and equitable national housing finance market is consistent with FHFA\u2019s obligation to Affirmatively Further Fair Housing and also makes good business sense. The demographics of the nation are undergoing a dramatic shift, and the majority of new households formed over the next decade will be households of color. In other words, future housing demand will be driven by people of color. A robust housing market, both for new homebuyers seeking to purchase homes and for existing homeowners seeking to refinance or sell their homes, cannot exist in the absence of access to mortgage credit on fair and equitable terms for all creditworthy borrowers.\u201d<\/p>\n\n\n\n

With respect to the rule, the advocates believe that FHFA should do the following: <\/p>\n\n\n\n