HousingWire, April 9, 2024, The Opportunity Cost Of Modern-Day Redlining
Lenders need to carefully evaluate their lending strategies to ensure that they are not unintentionally practicing redlining by neglecting MMCT and LMI neighborhoods, or they may face millions in penalties. But the true cost of redlining is still larger, and it’s counted in lost revenue, not legal repercussions. The cost of lost business opportunity is even higher.
Right now, the market is facing a unique alignment of regulatory focus, community need, and opportunity. Forecasts in the industry predict that most mortgage growth over the next several years will come from MMCTs and BIPOC communities. Lenders who shift their strategies away from the traditional framework to a more inclusive approach are likely to find more success than those who stick to the status quo. Shifting strategies is not only ethical and compliant, it’s financially lucrative.
