RISMEDIA, June 11, 2009-American consumers seeking mortgages will now have the option of using lenders that are certified as “safe,” “fair” and free of predatory lending, under a 21-member national network known as the nonprofit “Fair Mortgage Collaborative” (FMC), the members of which are committed to providing homeowners and home buyers access to mortgages at a fair rate of compensation. The major effort supported by the Ford Foundation is the first national campaign of its kind aiming to restore consumer confidence in mortgage lending in the wake of the ongoing mortgage foreclosure crisis fueled in large part by predatory lending abuses.
The Fair Mortgage Collaborative (http://www.FairMortgage.org) will certify that lenders meeting five standards of conduct are “fair and safe,” including a ban on predatory lending practices. In addition, “certified lending organizations” – such as BECU (Boeing Employees’ Credit Union), Prime Alliance Solutions, Federation of Appalachian Housing Enterprises, Inc., Mortgage Grader and Clearinghouse CDFI – will offer the new FMC-certified “fair and safe” mortgages from coast to coast.
FMC’s current crop of certified lending organizations provide mortgages currently totaling $520,000,000 per year. That level is expected to double or more in the first year of the program, with further growth anticipated in out years as the demand for mortgages that are certified “fair,” “safe” and non-predatory takes hold.
FMC and its founders also includes foundations – such as Ford Foundation and Calvert Foundation – and advocacy groups (including the National Council of La Raza) and consumer protection groups (such as the Consumer Federation of America), loan counseling and lending networks (including NeighborWorks America) and secondary market intermediaries (such as Neighborhood Housing Services of America and Housing Partnership Network). The other members and partners of the Collaborative are (in alphabetical order): Acorn Housing, All Ahead, Center for Responsible Lending, Heron Foundation, Mortgage Grader, NHS Chicago, National Federation of Community Development Credit Unions, Opportunity Finance Network, School of Community Economic Development at Southern New Hampshire University, SEEDCO, Self-Help Credit Union, ShoreBank Corporation, and Wall Street Without Walls.
Janis Bowdler, chair, Fair Mortgage Collaborative said “America needs to restore consumer confidence in the mortgage lending process and we believe this is the way to get that important job done. The Fair Mortgage Collaborative is a Ford Foundation-funded endeavor to help lenders exemplify fair lending, and to serve as a responsible fiduciary for prospective borrowers in low-income communities. FMC members are committed to ending predatory lending and at this public launch are pledging to go beyond the requirements of current law to prohibit abusive, predatory, and unfair mortgage lending and marketing practices.”
George McCarthy, U.S. director development of finance and economic security, Ford Foundation, said: “The Fair Mortgage Collaborative brings together institutions that are working to provide a better alternative to the predatory lending practices that have caused so much damage to our communities.”
BECU Executive Vice President Joseph Brancucci said: “Mortgage lending practices that have taken place over the past several years have eroded consumer confidence in mortgage lenders. For BECU (Boeing Employees’ Credit Union) and Prime Alliance Solutions, we strive to make as many members as possible homeowners; however, it is equally important that it’s with a mortgage that meets their needs and allows them to stay in their home. We fully support the rigorous certification process that is required to participate in the Fair Mortgage Collaborative and national awareness of quality lending standards.”
“During uncertain economic times, American families need someone to look out for their best interest,” said Janet Murguía, president and CEO of NCLR (National Council of La Raza), a Collaborative member organization. “NCLR commends the Collaborative for its efforts to protect Americans from predatory lending through its certification program and applauds the efforts of member organizations like the Asociación de Puertorriqueños en Marcha (APM) who at the launch celebrated a family that recently bought their first home-the largest investment most Americans make and the key to the American dream.”
FMC Executive Director Howard Banker said: “A separate but equally important FMC goal is to provide consumers with information and education so they understand that they can choose to go to lending organizations that are fair and safe. This consumer education effort will improve lending practices, restore borrower confidence, and make the homeownership process once again a safe and responsible asset-building tool for hardworking American families and communities.”
The rigorous Fair Mortgage Collaborative certification process is based on the following five core standards:
1. FMC Lender Works for Customer, Not Other Way Around;
2. No Steering;
3. Absolutely No Predatory Loans;
4. Non-Standard Loans Require Clear and Compensating Customer Benefit; and
5. FMC Keeps Rules and Standards Current for New Loan Types.
For more information, visit http://www.FairMortgage.org.
