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NCRC Statement On FHFA Credit Score Model Changes

In response to the Federal Housing Finance Agency’s announcement that Fannie Mae and Freddie Mac will begin using modernized credit scoring models that factor in rent and utility payment histories, National Community Reinvestment Coalition President and CEO Jesse Van Tol released the following statement:

I applaud the modernization of a system that has too long punished the marginalized by ignoring the most significant expenses in a working-class life. Old, outmoded models of determining a person’s creditworthiness have been fencing too many families out of homeownership for decades by pretending that a person’s biggest monthly expenses didn’t exist when deciding what sort of mortgage they could afford. 

“Millions of Americans wrongly deemed ‘unscoreable’ for generations will now gain access to credit – and millions more will benefit from reduced transaction costs when they purchase a home and more sensible weighting of things like medical debt that do not accurately reflect the financial behavior that matters to lenders. Millions of families who have been treated as invisible by the mortgage industry despite years of diligent financial behavior will now have access to the generational wealth-building opportunity of homeownership.

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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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