Connecticut Mortgage lender George Souta read the new FHA guidelines that went into effect on Friday, February 15. Here is what if found in the new guidelines. Very interesting...
I read an article last week on the New HUD Guideline For Determining Housing Discrimination, which went into effect this past Friday, February 15, 2013. Preventing discrimination in housing is a good thing, but the criteria that HUD is using left me almost speechless.
Let me explain. The new HUD rule is based on a three-part-test, and is designed to whether or not a housing practice is discriminatory even if it is neutral on the surface. According to HUD Secretary Shaun Donovan, “housing discrimination comes in many forms. Discrimination doesn’t have to be intentional in order to have a damaging effect,” also according to Donovan “HUD, which has the responsibility and authority to interpret and enforce the Fair Housing Act, has long interpreted the Act to prohibit housing practices with an unjustified discriminatory effect, if those acts actually or predictably result in a disparate impact on a group of persons, or create, increase, reinforce or perpetuate segregated housing patterns.”
Donovan's second statement is what left me almost speechless. If this is going to be the standard, then who more than HUD fits their own definition of discrimination, with the implementation of their new changes this year, and with their new Debt-To-Income Ratio requirements. OH wait maybe The Consumer Financial Protection Bureau (CFPB) and the Dodd/Frank Act. Both of them have also reduced the ability of lower income Borrowers to purchase a home. The CFPB wants to set across the board a 43% Debt-To-Income Ratio on all Mortgage Programs, and both the CFPB and Dodd/Frank would welcome a requirement for Borrowers to have a 20% minimum Downpayment in order to purchase a home. Here again it would be the lower income Borrower that would be once again most affected. Let me repeat a portion of Donovan's last statement "Act to prohibit housing practices with an unjustified discriminatory effect, if those acts actually or predictably result in a disparate impact on a group of persons, or create, increase, reinforce or perpetuate segregated housing patterns.”
However, “HUD does not believe that the rule will have a chilling effect on lending in lower income communities or that it will encourage lawsuits challenging credit scores, other credit assessment standards, or the requirements of the Dodd-Frank Act … " This leaves me wondering what world do they live in. HUD wants to apply the New HUD Guideline For Determining Housing Discrimination on Lender, but HUD, CFPB, and Dodd/Frank are the biggest violators of the above statement made by Donovan, yet the New HUD Guideline For Determining Housing Discrimination will not apply to them. This is an excellent example of "Do as I say, but not as I do". Is this a double standard or what?
Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or email@example.com
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