The National Community Reinvestment Coalition plans on challenging the policy of certain lenders that require higher credit scores on Federal Housing Administration-insured loans than the agency itself requires.
The coalition contends that lenders are discriminating against minority borrowers by requiring a minimum credit score of 620 when FHA only requires 580 under its underwriting guidelines for a standard FHA loan with a 3.5% downpayment.
NCRC chief executive John Taylor told Kenneth Harney, a nationally syndicated housing columnist, that his group has identified 20 lenders that require the higher credit scores and plans to file administrative complaints against a subset of those lenders with the Department of Housing and Urban Development. (NCRC declined to name the 20 but will later.)
The complaints will allege fair lending violations. The coalition is slated to issue a press release on the matter on Wednesday, Dec. 8.
