19 community organizations urge FHFA to release data and analysis for proposed capital rule on the GSEs

This week, 19 national community organizations called on the Federal Housing Finance Agency (FHFA) to provide more clarity and transparency around the impacts of the agency’s proposed capital requirements for Fannie Mae and Freddie Mac (the Enterprises) before the end of a public comment period on August 31st.

The letter urges FHFA and the Enterprises to provide more information about the impact of the proposed capital rule and the agency’s updated liquidity requirements on mortgage rates, Fannie and Freddie’s cross-subsidization strategy, the mission in their charters and also how the proposal will intersect with the CFPB’s qualified mortgage rules’ safe harbor provisions. 

“Without greater transparency from the Enterprises and the agency around these real-world impacts, it will be extraordinarily difficult for the public to meaningfully comment on the proposed rule.” said Jesse Van Tol, CEO of NCRC. “The public needs to understand if the FHFA’s proposal will diminish the role of the GSEs in serving underserved consumers and markets, and which other market participants will serve these markets in their absence. We believe that the FHFA and the GSEs have done more modelling and analysis around all these questions that they can and should make public now.”

FHFA’s proposed capital rule, the agency’s new prescriptive liquidity requirements, penalties for validly underwritten mortgages that go into forbearance post-closing, and a new refinance fee announced this week will exacerbate a variety of challenges for LMI borrowers.

The proposed capital rule, as well as new updated liquidity requirements announced in June and that go into effect Sept. 1, is complex and requires a number of calculations and assumptions in order to grasp the real-world impacts on issues like how much the Enterprises guarantee fees and loan-level price adjustments (LLPAs) may increase, as well as the impact on the Enterprises’ business operations.

Read the full letter:

https://ncrc.org/fhfa-re-proposed-capital-rule-for-the-enterprises-sign-on-letter/

 

List of signers: 

National Community Reinvestment Coalition (NCRC)

National Association of Realtors

Better Markets

Center for Responsible Lending

Consumer Federation of America

Grounded Solutions Network

Leadership Conference on Civil and Human Rights

NAACP

National Association of Real Estate Brokers, (NAREB)

National Community Stabilization Trust

National Consumer Law Center (on behalf of its low-income clients)

National Council of State Housing Agencies

National Fair Housing Alliance

National NeighborWorks Association

National Urban League

New Jersey Citizen Action

Pittsburgh Community Reinvestment Group

Prosperity Now

UnidosUS

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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