In the wake of the mortgage meltdown of 2007-2008, regulators have sought to substantially stiffen lending requirements for lower-income homeowners. This regulatory activity, spurred by the suggestion that overly generous lending to consumers with little ability to pay played a key role in the credit crisis, may make have the unintended consequence of discouraging some well-qualified minority applicants from entering the housing market.
This potential downside to overly-stringent new rules has resulted in an unusual alliance.
Mortgage lenders and some non-profit organizations, including the N.A.A.C.P. and La Raza, are cooperating in an effort to protect working class and minority communities from stricter regulations on mortgage packaging that may ultimately discourage some applicants from minority groups from obtaining home loans. Among their targets: a proposal that would exempt mortgage packagers from bearing part of the risk in the loans they package if loan recipients provided a 20 percent down payment.