In October, the Federal Housing Finance Agency (FHFA), the conservator for Fannie Mae and Freddie Mac, announced that they were going add a question about language preference to the redesigned Uniform Residential Loan Application (URLA). Beginning in July of 2019, all mortgage applications will be required to ask the applicant what is their preferred language. Consumer groups and the Asian Real Estate Association of America supported this change. Other trade groups such as the Mortgage Bankers Association opposed the change. NAHREP chose to remain neutral. Surveys show that about 5% of homebuyers exclusively speak a language other than English. These people deserve to know what they are signing up for; however, NAHREP was concerned about the lack of clarity regarding what obligations this question might have on lenders. Will they be required to provide in-language service from application through closing, and perhaps beyond? Will the loan documents in English be binding to a person who has stated a preference for another language? Absent any clear guidance from regulators and state and federal lawmakers, these questions might have to be answered in court. My concern is that absent said clarity, lenders may choose to avoid doing loans for people who are not English proficient. Some may say this is a good thing. I don’t agree. There is a credible argument that this problem has been out there for decades and something bold needed to be done. Perhaps FHFA’s decision to add the language question will force the industry and lawmakers to finally provide clarity and direction to lenders. I hope so, but in an era where terms like diversity and inclusion are being purged from our national nomenclature, I have my doubts.
The usual solutions will not solve the current housing affordability crisis. Any solution that does not begin and end with a sustainable plan to radically increase housing supply is just noise. The barriers to increasing housing supply are complex and require the crucial cooperation of both public and private sectors, and more education.
It has been long understood that a nation of stakeholders makes for a strong union, and for that reason, closing the minority homeownership gap has been a goal and a topic of discussion for decades.
Between 2008 and 2012, more than six million people lost their homes to foreclosure, property values lost almost 40%, and non-distressed home sales fell to all-time lows. It was, without question, the worst real estate market since the great depression. Not surprisingly, the historic dip in the market was followed by a decade-long bull market, the likes of which we have never seen before. Residential real estate is a cyclical market. The...