Minority Borrowers

Minority borrowers will exceed 50% of all mortgage borrowers in the next 10 years, according to Mark Fogarty, Editor At Large, at National Mortgage News.  I had dinner with Mark last week and he shared several statistical analysis’ that support his supposition.  Mark also believes that the minority market, defined cumulatively as Blacks, Hispanics and Asians, will be primarily an entry level market.  Mark advocates a lowering of lending criteria to best serve this emerging borrower segment of the home buying public. He cites a conflict of agenda’s between the Executive Office calling for expanded lending practices and the Federal regulatory agencies tightening credit criteria, as well as failing to adequately explain penalty triggers in their new regulations that can be very costly to Lenders if inadvertently misapplied.  I agree with Mark that we are currently in a “catch 22”.  We need to step up our communication with our legislators through avenues like the MBA’s Mortgage Action Alliance and make our voice heard.

I started in this business way before FICO scores and Automated Underwriting Systems.  I long for the days when my Underwriter and  I would pull out the FHA 4155 or the Fannie Mae Guide and make a credit decision.  For the days that our decision was honored by those who purchased our loans and for the days that my risk of penalty and repurchase was limited to my or the borrower committing fraud.  Now I am being second guessed by AUS systems and live and die by FICO scores. In this mandated environment, I am subject to buy backs, fines and penalties at the whim of the investor and/or an untold number of federal agencies.  I am fully ready to expand my minority lending.  I know how to do it.  I am a Hispanic American, for crying out loud. And I will, just as soon as I see some sanity and consistency come back into the mortgage landscape.