Habitat for Humanity testifies that Dodd-Frank’s home mortgage reforms could threaten its work throughout the U.S.
WASHINGTON (July 11, 2012) —Habitat for Humanity will submit testimony today to the House Financial Services Committee’s hearing on the impact of the Dodd-Frank Act’s home mortgage reforms to share concerns regarding the Consumer Financial Protection Bureau’s (CFPB) qualified mortgage rule. If not written broadly enough, the new rule could inadvertently threaten Habitat’s ability to meet the needs of underserved segments of the housing market.
Habitat partner families, by design, do not qualify under standard underwriting guidelines used by banks and other private lenders, and there is significant risk that Habitat’s successful mortgage model will not be included in the new qualified mortgage “ability to repay” definition. Banks and state housing agencies could then be precluded from partnering with Habitat affiliates since non-qualified mortgage loans would face significantly higher liability risks.
As the CFPB moves forward with the development and implementation of qualified mortgage and ability-to-repay regulations, the final rule must consider the impact on all mortgage lenders, including nonprofit lenders, while protecting the stability and integrity of the for-profit mortgage market.
“Habitat is also hopeful that these protections will be designed in a manner that does not penalize existing good actors already working on behalf of consumers within the market,” said Liz Blake, senior vice president, Habitat for Humanity International. “It would be unfortunate if one-size-fits-all regulatory requirements necessitated difficult decisions on our part like diverting our ministry’s limited resources toward ensuring compliance rather than assisting families in need.”
Habitat’s 1,500 U.S. affiliates serve as builders, mortgage lenders and servicers for its low-income partner families. These families purchase their homes with no-profit loans which are made affordable through mandatory sweat equity, volunteer labor and cash and in-kind donations.
About Habitat for Humanity International
Habitat for Humanity International is a global nonprofit Christian housing organization that seeks to put God’s love into action by bringing people together to build homes, communities and hope. Since 1976, Habitat has served more than 500,000 families by welcoming people of all races, religions and nationalities to construct, rehabilitate or preserve homes; by advocating for fair and just housing policies; and by providing training and access to resources to help families improve their shelter conditions. For more information, to donate or to volunteer, please visit www.habitat.org, or follow us at www.facebook.com/habitat or at www.twitter.com/habitat_org or join Habitat’s blog community at www.habitat.org/blog.