NCRC Applauds FHFA Principal Reduction Modification Program

Washington, DC – Today, in reaction to the announcement by the Federal Housing Finance Agency (FHFA) that Fannie Mae and Freddie Mac will offer principal reduction to certain seriously delinquent, underwater borrowers, NCRC President and CEO John Taylor made the following statement:

“We applaud FHFA and Director Watt for taking this important step in the right direction. The new principal reduction modification program will help certain underwater borrowers avoid foreclosure and stay in their homes. That’s a very positive thing. That said, with the scope announced today, this program will have limited impact.”

“This represents the first bite at the apple. Hopefully this program will serve as a model for what can be done with the larger portfolio of delinquent loans that could be modified at Fannie Mae and Freddie Mac.”

About NCRC:
NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness in banking, housing and business development.

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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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