HUD And FHFA combine efforts to focus on fair lending

HUD and FHFA publicly agreed to combine efforts to enforce the Fair Housing Act for Fannie Mae and Freddie Mac. The two bodies signed an MoU to ensure that government-backed agencies alongside Federal Home

Loan Banks work by the Act to ensure fair lending. According to the signed MoU, the two bodies will work together to share information, carry out investigatory tasks, review compliance, and undertake other tasks that will ensure the enforcement of the Act.

Although the two agencies will be doing the job together, the HUD will primarily enforce the Fair Housing Act, while the FHFA will regulate

Fannie Mae, Freddie Mac, and the mortgage market. The collaborative investigation is one thing that raised an eyebrow in the industry, considering that the HUD and the FHFA haven’t undertaken such a significant move before, especially regarding fair lending policy.

THE FAIR HOUSING ACT AND WHAT IT MEANS

The Fair Housing Act of 1968 shields housing buyers and renters from discriminatory acts initiated by sellers, landlords, and lending institutions. In essence, the Act describes discrimination based on

race, sex, religion, disability, etc., as illegal. Thus, any individual or financial body involved in discriminatory acts against renters and buyers, such as refusing to sell a house or charging a higher interest rate for mortgage loans, faces the law.

The housing act was amended in 1974 to add gender discrimination and in 1988 to include disabled individuals. In addition, states may make a few alterations to the Act by adding to it in their respective jurisdictions. The HUD is the principal enforcer of the Fair Housing Act.

WHAT THE COLLABORATION WILL BRING TO THE REAL ESTATE INDUSTRY

The mortgage market has a history of discrimination, especially towards the Black low-income earners and the minority groups. Although some financial institutions have helped lend to minorities, thanks to the Community Reinvestment Act, the rise of non-bank lenders is negatively impacting the lending industry. With people in communities unable to access credit, homeownership opportunities become limited.

The widespread call by some of these marginalized individuals led to the recent collaboration between the FHFA and HUD. THANKS TO THE AFFIRMATIVELY FURTHERING FAIR HOUSING RULE; the HUD has a more definitive approach on the matter. The AFFHR will emphasize abolishing discriminatory lending and rewrite history patterns of segregation towards the lowincome earners who can’t access the various lending opportunities.

The housing rule will accomplish affordable housing policies, address inequality, and turn ethnic communities into an area of endless opportunities. The Memorandum of Understanding between the two bodies will give each entity an avenue to extend support to each other’s fair lending policies. In addition, the regulators will share lending responsibilities and advise the other when there’s a pending investigation or review.

The collaboration is applaudable. If more mortgage lenders make collaborative efforts like this in the industry, as the MBA has been clamoring, affordable lending for housing will no longer be limited or segregated. In addition, should any complaint of discrimination be reported, the concerned bodies will swiftly move into action.

Buying a home has never been easier, but you need a solid realtor for expert advice on the best property to purchase. All you need is to contact Eric L. Frazier for assistance with buying a home or investment property. Eric L. Frazier MBA is a licensed Mortgage Advisor NMLS 461807 and can be reached at 800-2611634 ext. 703.

ABOUT THE POWER IS NOW MEDIA, INC

The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, headquartered in Riverside, California. We advocate for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow. com.

Eric Lawrence Frazier, MBA. President and Founder, The Power Is Now Media .

References

https://www.americanbanker.com/news/hud-fhfapact-redoubles-fair-housing-enforcement-forfannie-freddie https://www.google.com/amp/s/www.housingwire. com/articles/hud-and-fhfa-raise-the-focus-on-fairlending/%3famp=1