Recommendations to increase minority homeownership
through reform of Fannie Mae
Fannie Mae’s disparate practices are hidden by overly
broad housing goal categories and the government’s
policy of evaluating affordable housing goals only at the
national level.
We offer a number of recommendations in the full report to
address this problem. In summary, we call on Congress to
take the following actions:
1) Establish a new GSE housing goal for underserved
minority borrowers with separate subgoals for
African-American, Hispanic and other minority borrowers
that HUD determines are underserved.
2) Establish affordable housing standards for GSE
performance in large metropolitan areas and other local
geographic areas as appropriate. These standards should
ensure that underserved segments of local mortgage markets
are adequately served by the GSEs. A formal review of GSE
performance in satisfying these standards should be
undertaken when evidence of disparate treatment like that
we found in Dallas/Fort Worth is identified by HUD or the
public.
3) The GSE Public Use Database should be improved to allow
the public to better evaluate GSE performance in their
local communities.
4) Establish separate GSE affordable housing goals or
subgoals for home purchase and home refinance loans. The
new home refinance goals should direct the GSEs to extend
prime rate home refinance loans to each group of minority
borrowers, lower income borrowers and to borrowers living
in low-income and minority communities.
5) HUD should be granted full examination authority and
subpoena power over the GSEs for purposes of implementing
housing goal requirements and enforcing fair lending laws
in relation to the GSEs.
6) The Federal Reserve Board should conduct a study to
assess the number of FHA-insured mortgage loans originated
in the last two years that could have been purchased by the
GSEs.