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NCRC Calls For Federal Investigation Into Lenders' Refusal to Make Loans to Working Class Families

Files 22 Complaints With HUD Over Lenders' Unfair & Discriminatory Policies

WASHINGTON, DC -- The National Community Reinvestment Coalition (NCRC) today called on federal agencies and banking regulators to investigate the nation's largest Federal Housing Administration (FHA) approved lenders for possible violations of federal housing rules by refusing to offer loans to qualified Americans to the FHA policy of a minimum credit score of 580 and above with a 3.5% downpayment.

A recent NCRC investigation found that the majority of top FHA lenders failed to offer applications for federal-guaranteed loans to potentially qualified borrowers with credit scores below 620 or 640, even though FHA guarantees loans with credit scores to 580. These lenders have policies that establish "credit overlays" above the FHA policy, with minimum credit score requirements as high as 640. One-third of all Americans have credit scores under 620.

"Critical to our nation's economic progress is the ability of homeowners to get quality refinancing, and for homebuyers to reclaim vacant houses by accessing quality mortgage credit, " said John Taylor, president & CEO of the National Community Reinvestment Coalition.

"The decision by some banks to not follow the FHA's policy is cutting qualified borrowers off from accessing credit, and in doing so, causing harm to their ability to prosper, build wealth and for our economy to grow. And this decision is arbitrary, because the loans are 100% guaranteed, whether the borrower's credit score is 580 or 780. That means the loans with lower credit scores don't pose additional risk to the company, so there's no legitimate business defense for this across-the-board practice. A lender is only at risk if they fraudulently or improperly originated the loan, against FHA's underwriting criteria. As is the case across the secondary market, in that situation, the lender can be forced to buy back the bad loan," said Taylor.

Published in Press Releases
 
 
How to Use the Community Reinvestment Act (CRA)
to Promote Housing and Economic Opportunity in Your Community
 
 


Why is the Community Reinvestment Act (CRA) important?

CRA is a federal law that imposes an affirmative obligation on banks to serve the credit needs of low- and moderate-income communities and to take steps to provide equal access to responsible financial products and services to traditionally underserved populations.  Thanks to CRA, banks have actively promoted housing and economic opportunity for underserved groups by providing affordable mortgage programs, small business loan products, community development financing, funding for non-profit housing and economic development programs, etc.

Banks are regularly examined by the federal government to determine if they are meeting their CRA obligations.  Because an unsatisfactory CRA rating or questions about CRA performance can result in delays or denials of mergers, acquisitions or the expansion of services, banks often look for ways to maintain or improve their CRA records.


How can I or my agency maximize the benefits of CRA to promote housing and economic opportunity in my community?

To maximize the benefits of CRA within local communities, NCRC encourages community stakeholders to develop a CRA strategy that involves a combination of any or all of the following activities:

  • Submit written comments on the community reinvestment performance of banks in your local area when these banks undergo their regular CRA examinations;
  • Monitor bank mergers, acquisitions and expansions to identify strategic opportunities to encourage banks in your local area to improve their community reinvestment records;
  • Meet periodically with banks operating in your local area, even if they are performing well on their CRA exams, to discuss your community’s credit/capital/bank service needs and to suggest actions a bank can take to better meet those needs;
  • Meet with bank regulators to discuss the performance of specific banks, as well as improvements to the CRA exam process;
  • Encourage your local government or other local institutions with substantial bank accounts (e.g., churches, foundations, etc.) to establish a linked deposit program to ensure that only those banks with reasonable community reinvestment records are eligible to benefit from a financial relationship with major local depositors; and
  • Become a shareholder advocate – owning even a small number of shares in a publicly-held bank allows you to introduce, vote on and/or speak at shareholder meetings about shareholder resolutions that address community reinvestment concerns.


Remember to This e-mail address is being protected from spambots. You need JavaScript enabled to view it if you need assistance implementing any of these CRA-related activities.


How can I or my agency participate in the CRA exam process to benefit my community and clients?

Comments made by community stakeholders (including non-profits, local government agencies and individuals) that highlight strengths or weaknesses in a bank’s performance with regard to lending, investments or service provision that benefit underserved groups can have a strong influence on a bank’s CRA rating, as well as on the ongoing actions a bank takes to promote housing, financial and economic opportunity for traditionally underserved populations.

You can submit comments on a bank’s community reinvestment performance at any time.  If a bank is not undergoing a CRA exam at the time you submit your comments, simply instruct the bank and its federal regulator to place your CRA comments in the bank’s public file.  The next time a CRA exam occurs, the federal examiner is required to look at comments in the public file and the bank is required to report how it responded to any concerns raised.

NCRC can provide guidance and data analysis to help you develop your comments on a bank’s CRA record.


Why should community stakeholders meet regularly with banks to discuss CRA-related activities?

Community agencies and other stakeholders can approach banks, particularly those that receive poor CRA ratings, to suggest ways that financial institutions can improve their community reinvestment performance.  The development of mutually beneficial relationships between banks and community stakeholders has resulted in funding for housing counseling programs; new loan products that better serve small business entrepreneurs; increases in the number of bank branches in underserved neighborhoods; investments in local community and economic development loan programs and projects; financing for affordable mortgage products; sound credit alternatives to predatory payday loan products; etc.

To see if there are any specific issues you may want to discuss with a bank, you can check the results of that bank’s last CRA exam at http://www.ffiec.gov/craratings/default.aspx or you can contact NCRC for an analysis of a bank’s CRA-related performance.  NCRC can also help you prepare for your meetings with banks.


Why do bank mergers, acquisitions and expansions present a strategic opportunity to encourage banks to enhance their product/service offerings and/or to support programs that benefit traditionally underserved groups?

If valid questions about a bank’s CRA performance record are raised when financial institutions are engaged in a merger, acquisition or expansion process (particularly if the bank received a low CRA score on it’s last exam) federal regulators may delay or deny the merger, acquisition or expansion application involving that bank.  To avoid such costly delays, the financial institution(s) involved will often work with community stakeholders to develop a community reinvestment plan that addresses the problem(s) and that identifies specific funding and/or new products, services or investments the bank will offer in order to promote housing and economic opportunity for traditionally underserved groups.

To find out if there are any pending merger, acquisition or expansion applications that may impact your community and/or for assistance in preparing your response, call NCRC’s Membership Department at (202) 628-8866.


How can NCRC help me or my agency prepare CRA-related comments or engage in CRA-related discussions with banks?

NCRC can provide a detailed analysis of a financial institution’s community reinvestment record that addresses how well the bank serves the needs of low- and moderate-income and/or minority households through its basic banking, lending and investment services.  This analysis is provided FREE to NCRC members.

NCRC staff can also provide guidance on how to prepare CRA-related comment letters and engage in negotiations with financial institutions to secure funding, products and services that promote housing and economic opportunity for low- and moderate-income and minority clients.  Staff can help members frame and support their appeal and determine what community investment commitments it might be appropriate to ask a bank to make (e.g., develop new products that better serve small business entrepreneurs, fund housing counseling programs, invest in a housing/community development or small business loan fund, etc.).

In addition, NCRC members can communicate with other coalition members via our listserv to find out what has worked in other communities, see examples of comment letters written to regulatory bodies and, of course, elicit support from other allies for their CRA-related activities.


How can I or my agency get help from NCRC to support our CRA-related activities?

Staff from NCRC's Membership, Research and Legislative/Regulatory Affairs Departments are available to provide you with the support you need to utilize CRA to promote housing and economic opportunity in your community. To start the process, contact NCRC at (202) 628-8866 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Washington, DC -- The National Community Reinvestment Coalition (NCRC) today made this statement regarding measures the Obama administration is proposing to help the ailing housing market:

"If there is a problem with the President's plan, it's that Congress must approve it. The President has put forward some very sensible proposals to ensure that the housing market does not continue to ruin prospects for a strong economic recovery, said John Taylor, President & CEO of the National Community Reinvestment Coalition. "Congress needs to work with the President to pass these proposals, so we can stem the ongoing housing crisis."

"We are concerned that the American promise of opportunity is being held hostage by political concerns. Access to an affordable home is a keystone of the American Dream, and a pillar of economic security in America. Home ownership has been, and can continue to be, a ticket into the middle class. Fixing the housing market is in all of our interest, because doing so is necessary for a strong economic recovery," said Taylor.

"The President's proposal would begin to make homeowners damaged by the crisis whole again, as will the coming multi-state mortgage settlement. Streamlined and more affordable refinancing, servicing standards, efforts to rehabilitate and turn vacant homes into rental properties, and additional protections for homeowners are all significant and needed. Other efforts are needed as well, such as mandatory participation in foreclosure prevention programs and greater principal reductions. These efforts would ensure continued progress towards a housing recovery," Taylor said.

 

About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America's working families.  

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Published in Press Releases

NCRC's Housing Counseling Network Offers Loan Modification and Financial Assistance to Homeownershomesaver logo

  • Are you struggling to make your mortgage payments?
  • Are you unable to refinance?
  • Are you upside on your mortgage?
  • Are you late paying your mortgage?

 

If you answer "YES" to any of the following above, you may be in danger of facing foreclosure. Do not wait and contact us now for a FREE LOAN MODIFICATION COUNSELING. You're not alone. Millions of people across the United States are currently having trouble with their mortgage. Don't wait any longer!

We Can Help!

Live in DC? Unemployed, facing foreclosure? HCN can help.

If you or someone you know lives in DC, is unemployed and at risk of foreclosure, please contact NCRC's Housing Counseling Network today at 202-383-7702.

Learn how to apply for up to 15 months of mortgage assistance for DC residents. Call today to learn if you are eligible.

Published in Housing Counseling

Background

The Federal Reserve Board issued enforcement actions against four large mortgage servicers
--GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, and EMC Mortgage Corporation--in April 2011. Under those actions, the four servicers were required to retain independent consultants to review foreclosures that were initiated, pending, or completed during 2009 or 2010. The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.

If you had a mortgage loan on your primary residence and believe you were financially harmed during the mortgage foreclosure process by any of the four servicers in 2009 or 2010, you can request an independent review and potentially receive compensation. The four servicers are required to make the independent reviews available to borrowers as part of their compliance with the April 2011 enforcement actions.

A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) are also required to conduct independent reviews. (See below for the full list of servicers.)

Eligibility for Review

Borrowers are eligible for an independent foreclosure review if they meet the following criteria:

  • the property securing the loan was the borrower's primary residence;
  • the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and
  • the mortgage was serviced by one of the following mortgage servicers:
America's Servicing Company Countrywide National City Mortgage
Aurora Loan Services EMC Mortgage Corporation PNC Mortgage
BAC Home Loans Servicing EverBank/EverHome Mortgage Company Sovereign Bank
Bank of America Financial Freedom SunTrust Mortgage
Beneficial GMAC Mortgage U.S. Bank
Chase HFC Wachovia Mortgage
Citibank HSBC Washington Mutual (WaMu)
CitiFinancial IndyMac Mortgage Services Wells Fargo Bank, N.A.
CitiMortgage MetLife Bank Wilshire Credit Corporation

 

If you previously filed a complaint with these servicers about foreclosures pending during the review period, you may still seek an independent review of your foreclosure.

There are no costs associated with being included in the review; the review is a free program. Beware of anyone who wants payment to assist you in connection with the independent foreclosure review or any other foreclosure assistance program.

Review Process

Information about the review process, including how to request an independent review, was mailed to potentially eligible borrowers in November and December 2011. If you believe that you meet the three criteria but have not received a mailing, call 800-475-NCRC (6272).  Individuals can also get more information about the review through a website set up by the servicers, www.IndependentForeclosureReview.com. A list of Frequently Asked Questions and Answers are available on the website.

Don't Delay. Call Us Today. (800) 475-NCRC

Watch out for scams - there is only one Independent Foreclosure Review. Beware of anyone who asks you to pay a fee for any foreclosure review service, such as completing the Request for Review Form.

Published in Housing Counseling
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