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.

Washington, DC -- Today, at the National Community Reinvestment Coalition's (NCRC) annual conference, a panel of top experts will discuss and debate how best to reach equitable, workable solutions to the foreclosure crisis. The plenary will feature Joseph Smith Jr., monitor for the national mortgage settlement, Franklin Raines, former Fannie Mae Chairman and CEO, Marc Morial, President of the National Urban League, Mark Calabria, Director of Financial Regulation Studies at the Cato Institute, Diane Thompson, Of Counsel at the National Consumer Law Center, and Hubert Van Tol, Director for Economic Justice at Pathstone. The panel will discuss the measures necessary to stop the foreclosure epidemic, implement principal reductions on a large scale, and bring the housing market and economy back to full strength.

"We are very pleased to have this group of leading experts tackle these critical issues at our conference," said NCRC President and CEO John Taylor. "The housing market will continue to be a drag on the economy until policy makers and financial institutions alike can come together and offer serious, equitable remedies. This event is a forum to bring constructive ideas to the forefront."

"Some see the current economy as a glass half empty, and some as a glass half full. But no matter how you look at it, the broken housing market is a hole in the bottom of that proverbial glass. Until we fix it, we will never fill the glass."

Joseph Smith, Jr. made the following statement about the conference: "The consumer advocates attending NCRC's meeting are true experts about the issues Americans face in the housing market. This conference marks an important first step in what I hope will be a productive working relationship with these advocates. I hope that together we will find a way to reboot the mortgage industry in a way that is more focused on the consumer."

The conference also features workshops and state-of-the-art training to give NCRC's members and conference participants the tools to implement change in their communities.

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Bank of America is announcing on Thursday a loan modification program to help military service members who are behind on their mortgages. What's unique about the program is that the bank is offering to reduce the principal owed on the loans instead of just adjusting the interest rate.

There is already a law designed to protect military personnel from financial stress. It bans foreclosures and reduces interest rates while they're on active duty.

What Bank of America is offering is a special program to help service members once they are no longer on active duty and no longer protected by the law.

"Without principal reduction, they may not be able to recover from that situation, and foreclosure would be their only option," says Dan Frahm, a spokesman for Bank of America. "We think principal reduction applied here puts us down a path to help them keep their home."

Initially, the program only applies to loans Bank of America owns, not the ones it services that are owned by investors.

"It's a good thing for some of the military people who qualify, but there are a lot more others who would benefit from a principal write-down," says John Taylor, president of the National Community Reinvestment Coalition. "Hopefully, this is the beginning of moving in that direction."

Frahm says the bank doesn't think principal reduction is the answer for everyone. And there are no plans to expand the program beyond those who are leaving active duty.

Washington, DC –  The National Community Reinvestment Coalition (NCRC) today applauded the Consumer Financial Protection Bureau for their enforcement action against Capital One. The action follows NCRC's challenge of Capital One's acquisition of ING Direct and HSBC's credit card unit. NCRC argued that the company should not be allowed to become Too-Big-to-Fail given its record on consumer issues.

"CFPB's enforcement action sends a clear message: it's a new day. We applaud the Consumer Financial Protection Bureau for doing exactly what Congress intended for them to do: acting as a nimble and powerful agency that protects consumers against unfair and abusive actions," said John Taylor, president & CEO of the National Community Reinvestment Coalition.

"Today's enforcement action against Capital One for deceptive credit card practices confirms and vindicates the serious concerns the National Community Reinvestment Coalition raised about Capital One during their acquisition of ING Direct. Though the merger was approved, it is clear that the scrutiny brought to bear from NCRC's objections has born results for consumers. This penalty calls into question why the Federal Reserve allowed a bank, known for its deceptive practices, to get even bigger," said Taylor.

"When a consumer deals with a financial institution, they should be guaranteed fair treatment. This is our goal. NCRC has also filed complaints against Capital One in several other areas, including for mortgage servicing practices and discriminatory lending. These complaints remain active," said Taylor.

"We'd like to believe that the CFPB's action fixes all of the problems with Capital One, but that is not the case. We continue to have concerns about Capital One's abusive treatment of consumers, business lending via credit cards and their record of investing in communities, as they have grown to be the 5th largest bank in the country," said Taylor.

About 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. To find out more, visit http://www.ncrc.org.

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Hundreds of NCRC members expected to comment and testify before bank regulators this summer

Atlanta, GA – Today, eight members of the National Community Reinvestment Coalition testified before the bank regulatory agencies regarding ways to improve the Community Reinvestment Act (CRA) to leverage hundreds of billions of dollars more in private investments for job creation and sustainable homeownership. The NCRC members and national partners testifying include: the Center for Responsible Lending, the Housing Assistance Council, National Council of La Raza, Operation Hope, Inc., the Atlanta Neighborhood Development Partnership, the Community Reinvestment Association of North Carolina, Community Development Corporation of Marlboro County, and Housing Education and Economic Development (HEED) of Mississippi (Exec. Director, Charles Harris pictured right). This is the second of four regulatory hearings that NCRC and its members will be attending and testifying at throughout the summer; NCRC’s testimony from the first hearing can be found here: http://bit.ly/8Y3Gke

“While the financial reform brought about by the Dodd-Frank act will guard against abusive and reckless behavior, it will not ensure that small businesses and responsible homeowners have access to the credit that they need to prosper. The whole of the private market must be engaged in the provision of capital and credit, the lifeblood of vibrant communities. The Community Reinvestment Act has encouraged banks to pursue their commitment to communities in a safe and sound manner. It should be expanded and improved, to better promote job creation and sustainable homeownership,” said John Taylor, president and CEO of the National Community Reinvestment Coalition. “I want to congratulate the hundreds of NCRC members who will comment or testify this summer before the bank regulatory agencies. Banking may seem to be an arcane subject to some, but if the financial crisis has taught us anything, it’s the centrality of the financial system to the health and vibrancy of our neighborhoods.”

A complete set of recommendations from the National Community Reinvestment Coalition can be found here: http://bit.ly/8Y3Gke. Specific topics to be discussed at the Atlanta hearing include access to banking services to the under-banked and un-banked individuals in underserved and distressed areas, and improvements to the CRA performance tests with a concentration on rural communities and small institutions.

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.

http://www.ncrc.org/

Click here to download press release as a PDF

CONFERENCE WATCH:

NCRC Urges Committee Withstand Pressure to Remove Independent Appraisals, Sounds Concern on Rating Agencies’ Conflict of Interest But Praises Senate Vote on Homeowner Advocate in HAMP Program

Washington, DC (June 16, 2010) -- Today John Taylor, CEO and President of the National Community Reinvestment Coalition, urged the conference committee to withstand pressure to remove independent appraisal requirements on mortgages in the financial reform bill and expressed disappointment with its failure to resolve the troubling conflict of interest between credit rating agencies and Wall Street. Taylor also urged inclusion of an Office of the Homeowner Advocate in HAMP to conduct loan modification appeals brought by homeowners and serve as a policy voice for homeowners.

Taylor said: “Financial reform cannot happen with removing the existing monetary incentives we have allowed the financial industry to build into financial products, including mortgages and the services rating agencies provide. We took a step backward yesterday by refusing to deal with the rating agencies’ conflict of interest. We cannot afford to take another step backwards by caving to pressure from the brokers and Realtors to remove independent appraisals on mortgages. Inflated valuations on homes helped blow the housing bubble bigger and bigger until it burst. To prevent another crisis, we need to remove the financial incentives to do more harm than good.”

Washington, DC- Early this morning, the Conference Committee passed the Financial Regulatory Reform Bill.  John Taylor, NCRC’s president and CEO, made this statement regarding its passing:

“NCRC is very pleased to see some major steps being taken to overhaul the banking system. The bill offers major consumer protections that did not exist prior to President Obama’s and Barney Frank’s call for reform. The creation of the Consumer Finance Protection Bureau (CFPB) as a independent agency should be able to create rules and regulations and protect consumers from future abuses. It is critical however that this independence not be undermined by the fact that the Federal Reserve Bank will house, pay for and be part of the oversight agency that has the authority to veto decisions of the CFPB. Only time will tell as to how much influence the banking regulators and others have over this new important agency.”

Major components of the bill include:

Consumer Agency:

• A strong consumer agency was created to protect consumers and enforce regulations on mortgages, credit cards and other financial products.
• Independent Funding.
• Director appointed by the President and Confirmed by the Senate.
• Enforcement of pay day lenders, and check cashiers.

Help for Homeowners:

• Assistance to unemployed borrowers facing foreclosure.
• Money provided for the neighborhood stabilization fund which helps with assistance to borrowers for foreclosed or abandoned properties.
• Funds provided for counseling (Legal Aid).

Voluntary nature, rising unemployment and underwater homeowners impede progress of foreclosure prevention program

Generating Real Opportunities for Work Transforming Housing Initiative Announced by President Clinton at Clinton Global Initiative America Meeting

Washington, DC – The National Community Reinvestment Coalition (NCRC) and its principal partners, including Chicanos Por La Causa (CPLC), NALCAB—National Association for Latino Community Asset Builders and the AFL-CIO Building and Construction Trades Department (BCTD), introduced today an initiative to train workers to return vacant and abandoned properties to productive use. The initiative – Generating Real Opportunities for Work Transforming Housing (GROWTH) – was announced by former President Bill Clinton during the Clinton Global Initiative America meeting in Chicago on Friday.

"The GROWTH initiative tackles the two most critical problems facing America today: jobs and housing. By engaging private capital in stabilizing neighborhoods and putting community residents to work, we'll be helping the economy return to growth," said John Taylor, President & CEO of the National Community Reinvestment Coalition. "We're very pleased that President Clinton and the Clinton Global Initiative have recognized the transformative impact that this initiative will have on neighborhoods."

"This is bringing private dollars to expand a proven initiative which will allow us to have a deeper and a broader impact in many of the underserved local communities across the country," said Edmundo Hidalgo, President and CEO of Chicanos Por La Causa. "We are extremely excited to have the support of President Bill Clinton and look forward to collaborating with the Clinton Global Initiative to help more individuals and families reach their dream of homeownership and preserve the fabric of American neighborhoods."

"We're excited to be a part of the GROWTH initiative, and to bring our track record of collaboration to stabilize neighborhoods and create jobs across the country. We think the GROWTH initiative will be transformative for communities of color," said Noel Poyo, Executive Director for NALCAB.

The GROWTH initiative will return at least 4,100 units of single-family housing to productive use while creating job training and placement opportunities for local residents. This project expands on NCRC and its partners' successes in stabilizing neighborhoods and training and placing over 10,000 workers in 40 states, primarily in union apprenticeships jobs.

NCRC's unique approach combines the best of existing housing and workforce development practices with new approaches to financing and partnerships with nonprofit developers who understand both the problems and opportunities of redeveloping vacant and abandoned housing.

This four-year initiative will start in Maricopa County, AZ, and in the first year, expand to seven states with high concentrations of real estate owned (REO) inventory. Construction teams will be led by CPLC, a longtime NCRC member, and its local affiliates. In partnership with the BCTD, NCRC will implement a nationally acclaimed standardized pre-apprenticeship curriculum and make living wage jobs available through nonprofit developers and their high-road contractors.

About 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. To find out more, visit http://www.ncrc.org

About Chicanos Por La Causa

Chicanos Por La Causa Inc. (CPLC) is a regional community development corporation committed to building stronger, healthier communities as a lead advocate, coalition builder, and direct service provider. The organization promotes positive change and self-sufficiency to enhance the quality of life for the benefit of those we serve. For more information, visit www.cplc.org

About NALCAB:

The NALCAB—National Association for Latino Community Asset Builders represents and serves over 80 members in 30 states that are a geographically and ethnically diverse group of nonprofit community and economic development organizations that are anchor institutions in our nation's Latino communities. NALCAB's mission is to build financial and human assets as well as real estate and technology resources in Latino families, communities, and organizations. For additional information about the CPLC/NALCAB NSP2 Consortium, visit www.nalcab.org/nsp2.

About CGI America

President Clinton established the Clinton Global Initiative America (CGI America) to address economic recovery in the United States. CGI America brings together leaders in business, government, and civil society to generate and implement commitments to create jobs, stimulate economic growth, foster innovation, and support workforce development in the United States. Since its first meeting in June 2011, CGI America participants have made more than 100 commitments valued at $11.8 billion. When fully funded and implemented, these commitments will improve the lives of three million people, create or fill more than 150,000 jobs, and invest and loan $354 million to small and medium enterprises in the United States. The 2012 CGI America meeting will take place June 7-8 in Chicago. To learn more, visit cgiamerica.org.

About the Clinton Global Initiative

Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to create and implement innovative solutions to the world's most pressing challenges. CGI Annual Meetings have brought together more than 150 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date CGI members have made more than 2,100 commitments, which are already improving the lives of nearly 400 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued at $69.2 billion.

CGI's Annual Meeting is held each September in New York City. CGI also convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States, and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world. For more information, visit clintonglobalinitiative.org and follow us on Twitter @ClintonGlobal and Facebook at facebook.com/clintonglobalinitiative.

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Washington, DC--On Friday, September 24th, NCRC will testify before Federal Reserve Board on making critical improvements to HMDA data, so that lenders can be held accountable for the types of loans they are issuing to communities.

“We are in an era of some of the most complicated mortgage products to-date and given the strain that bad mortgage loans have put on our economy, lenders should be examined with a microscope now more than ever. In the era of reckless and corrupt lending, it is crucial that HMDA actually does what it was enacted to do, which is identify discriminatory lending patterns and determine if financial institutions are meeting local housing needs,” said John Taylor, president and CEO of NCRC, in reaction to the Federal Reserve’s 2009 HMDA data report.

The recently enacted Dodd-Frank bill mandates significant improvements to HMDA data. NCRC calls upon the Federal Reserve Board and the new Consumer Financial Protection Bureau to expeditiously implement these improvements. In today’s release, the Federal Reserve Board states that the current HMDA data lacks information on credit scores, property values, and other factors necessary to fully account for disparities in racial access to affordable loans.