New down-payment mandates threaten to exclude majority minorities from home ownership
There’s no denying that the housing fiasco played a big role in the overall crisis that threatened our country’s financial system. Yet, what should be challenged is how communities of color should be the scapegoats of the housing crisis. Because so many black and Latino families were victimized by predatory lenders, it was these families who were disproportionately affected when the crisis in housing occurred.
In 2008, Julio Angulo of suburban Virginia faced foreclosure on his home.
Predictably, the federal response to the housing crisis has been more reactionary than solution-oriented. In their quest to keep anything like this from crippling our economy again, regulators want to mandate new down-payment regulations. The only problem is it threatens to exclude low-income blacks and Latinos from ever having the opportunity to own a home.
A new report titled “Balancing Risk and Access: Underwriting Standards for Qualified Residential Mortgages,” published by the UNC Center for Community Capital and the Center for Responsible Lending, found that if federal regulators set down-payment standards on new mortgages at 20 percent, it would have a profound impact on Latino and black borrowers.
The results are particularly striking for African-American and Latino home buyers. A mandatory 20 percent down-payment requirement would exclude about 75 percent of African-American and 70 percent of Latino borrowers who could be successful homeowners from obtaining fairly priced mortgages.
Read the full story at Latina Lista