More than 40 California organizations join with the California Reinvestment Coalition in calling on the Consumer Financial Protection Bureau to strengthen the Home Mortgage Disclosure Act through greater transparency.
HMDA requires lenders to collect and publish data about mortgage lending, and many advocates credit the act with increasing access for communities that had previously been redlined.
Under financial reform, the CFPB was given authority over the law, and the CFPB is gathering public comments on several proposed changes.
Advocates suggested several changes to the current proposal, including:
- Requiring loan modification data to be reported by banks and servicers;
- Disaggregating the overly broad “Asian” race category to allow for more accurate reporting;
- Capturing more information about languages spoken during a loan transaction;
- Disclosing if a borrower is going to own a property with somebody who is not on the loan;
- Determining if a borrower received pre-purchase counseling (associated with fewer foreclosures);
- More transparency for whether lending for multi-family rental housing is for affordable housing units; and
- Requiring reporting on whether commercial loans and home equity lines of credit loans are used to support small businesses
“In updating HMDA rules, the CFPB can finally increase transparency into mortgage modifications so that it’s clearer if foreclosure relief is actually happening, and if so, in what communities. The City and County of San Francisco already asked for and received this type of modification data from Bank of America, so we know it’s possible,” said Kevin Stein, associate director at CRC.
Concerns about widowed or widower homeowners also headlined concerns.
“There are 10,000 baby boomers turning 65 every day, and we’re already seeing problems with widowed homeowners losing their homes if they’re listed on title but not on the mortgage. To address this problem, lenders should be required to note when they’re making a loan if there is another property owner who will not be listed on the loan, but who has a legal interest in the property,” said Maeve Elise Brown, executive director at Housing and Economic Rights Advocates.
They also called for more detail in the classification of “Asians.”
“Because there is only one ‘Asian’ category, we see that important socio-economic differences and experiences between the many Asian American Pacific Islander communities (like the level of homeownership), are lost. Increasing the categories would allow for a far more accurate analysis of our diverse communities,” said Jane Duong, director of programs & advocacy at the National Coalition for Asian Pacific American Community Development.
Heloc issues especially for business owners is also a concern.
“Many of the families we helped with to avoid foreclosure had used Home Equity Lines of Credit as a source of capital for their small businesses. When the foreclosure crisis erupted, many of their businesses were impacted, which threatened their ability to pay their mortgages, pay their employees, and keep their businesses open. By asking if a customer is obtaining a HELOC to fund their small business, we can get a better sense of what’s driving defaults, and if access to small business loans is a problem,” said Hyepin Im, president and CEO of Korean Churches for Community Development comments.