Coalition Sounds Alarm on Predatory Rule

The Consumer Mortgage Coalition is raising a red flag about a HUD proposal to prevent Fannie Mae and Freddie Mac from getting affordable housing credit for loans with predatory features.The Department of Housing and Urban Development has proposed an expedited process for listing new terms and practices that it considers abusive. But the CMC says it is very concerned that the lack of checks and balances could hurt all affordable housing lending. "Any expansion of the list of unacceptable terms or required practices requires careful consideration," CMC executive director Anne Canfield says in a comment letter. Ms. Canfield noted that federal banking regulators considered but decided against creating a list of loan terms and practices that could lead to the denial of Community Reinvestment Act credit. If HUD moves ahead with its rule, the CMA recommends the creation of a "safe harbor" so Fannie and Freddie are not penalized for purchasing CRA loans.