Commitment to Minority Homeownership and Expanding Responsible Lending

Commitment to Minority Homeownership

We believe you can trust me about commitment to increase science about mortgage especially minority homeownership. An African-American first-time home buyer and a single mother of three, Larryette Magett was thrilled to provide her children with their first home, including a "cozy" basement for her children to share with their friends. To purchase her Milwaukee, Wisconsin home, Larryette used Fannie Mae's HomeChoice mortgage product for people with disabilities, a perfect option for her since one of her children has a disability. Now Larryette is coaching her sister on the steps to homeownership. "I told her it worked out, that I got my house ... And, after I pass, I will be able to leave my kids with something." View (PDF) Larryette Magett's full story.

Over the last decade, we has made available, through our lender and community partners, more than $3 trillion in private capital for 18 million minority and underserved Americans to own or rent a home as part of our American Dream Commitment® (PDF). Through our continuing dedication to increasing homeownership opportunities for minority home buyers, Larryette Magett and others like her can live the American Dream.

The American Home Buyer
The fastest growing groups of home buyers are minorities, families of modest means, new Americans, and other underserved individuals and families -- many with very little wealth and complicated job and financial histories. According to National Homeownership Survey (PDF), these groups face challenges when it comes to having access to accurate information about the home-buying process.

Everyday, its housing partners strive to expand homeownership opportunities for millions of Americans. Helping minorities turn their hopes and dreams into the reality of owning a home is at the heart of we mission.

American Dream Commitment
Long and proud history of taking on big housing challenges. The American Dream Commitment follows on a Fannie Mae tradition of establishing big public goals consistent with the company's mission to "tear down barriers, lower costs, and increase the opportunities for homeownership and affordable rental housing for all Americans."

We pledged to help 6 million families -- including 1.8 million minority families -- become first-time homeowners over the next decade.We commitment to first-time home buyers is part of the next stage of the company's American Dream Commitment, a plan announced in 2000 to provide $2 trillion in private capital for 18 million minority and underserved Americans to own or rent a home by the end of the decade. The pledge boosts the company's commitment to President George W. Bush's Minority Homeownership plan and will help raise the minority homeownership rate from 51 percent currently to 55 percent, with the ultimate goal of closing the gaps between minority homeownership rates and non-minority homeownership rates entirely.

Our Partnerships
We can't achieve these goals without our partners. We works with local governments, lenders, public officials, housing organizations, community nonprofits, real estate professionals, and others across the country to create long-term partnerships to help create minority homeownership opportunities. As part of our American Dream Commitment, Fannie Mae has launched collaborative relationships with such groups as the National Association of Home Builders to expand "Workforce Housing" (PDF) by pledging to increase the supply of affordable housing where it is needed most. Specifically, this partnership targets the revitalization of 1,000 communities across the country.

To create community-based lending opportunities by working through organizations including the National Urban League (NUL) and the National Association of Hispanic Real Estate Professionals (NAHREP).

Initiatives and Products
With the knowledge that one of the primary challenges that many minority and new immigrant families face in the homeownership process is access to reliable information and guidance, Fannie Mae developed Home Counselor OnlineTM, an innovative software tool we share with homeowner educators and other housing professionals so they can help low- and moderate-income families financially prepare for homeownership. By empowering housing professionals with technology tools, we help to remove the barriers to homeownership.

We have created a wide-range of affordable housing solutions that enable our lending partners to grow their businesses while expanding services to underserved communities and emerging markets.

The largest investor in minority banks in the country. Our Community Development Financial Institutions Initiative continues to strengthen America's communities by providing investment capital to community-focused financial institutions. These groups, typically serving central cities, work to increase housing opportunities for underserved markets. In fact, under the American Dream Commitment, Fannie Mae has committed to increase its CDFI investments to $150 million by the end of the decade. We also continue to work with members of the National Bankers Association to help break down the obstacles to minority homeownership.

In addition, we have created the Minority- and Women-Owned Lenders Initiative to ensure that minority and women-owned lenders have information about the full suite of Fannie Mae tools, products, and services to help stimulate development and revitalization in urban communities.

Our efforts to increase minority homeownership include state-of-the-art e-commerce strategies. Fannie Mae and our partners teamed to create the "Owning a Home" channel on BET.com, a resource for home buying and homeownership for African Americans. Together with the online subsidiary of Univision Communications and a lender partner, we helped launch Casa channel on Univision.com. Casa is the first online Spanish-language resource for home buying and homeownership.

Looks to the Future
The desire to own a home remains a powerful force that drives the American economy. Simply put, the prospect of buying and owning a home creates feelings of optimism about a family’s financial future, about the viability of their community, and the overall strength of our nation. Only in America is it possible for an average wage earner to bring the dream of homeownership to fruition. And, only in America does this basic dream translate into the mighty financial force that helps to revive our cities, equalize opportunity, and drive a healthy economy.

Its housing partners strive everyday to protect and expand the American Dream of homeownership for minorities. Housing powers our economy and creates millions of jobs. Owning a home offers real wealth for millions. And for others who cannot or choose not to own, the housing system strives to provide them with quality, affordable rental housing -- an apartment that an individual or family is proud to call home.

Throughout our years of commitment to tackling the toughest housing problems, Fannie Mae and our housing partners have demonstrated our resolve that the best housing delivery system in the world can and must do much more. For today, tomorrow, and the future, Strives each day to help minorities reach that goal and live the American Dream.

Expanding Responsible Lending

Promoting responsible lending, and is working in local communities throughout the nation to help develop solutions to the problem of predatory lending. Through our Mortgage Consumer Rights agenda and American Dream Commitment®, we are committed to increase and support public advocacy to protect mortgage consumer rights. We believe that all home-buying consumers should be treated equally and should have access to the lowest cost mortgage for which they qualify. We also want home-buying consumers to know the true cost of the mortgages they are being offered -- including all fees and charges.

We are pursuing our goal to eliminate predatory lending practices through an eight-point responsible lending strategy that includes

* Issuing business guidelines to avoid purchasing loans with abusive features. The business guidelines can be found on page 6 of the 2000 Lender Letter PDF -- Lender Letter 03-00.
* Expanding the application of conventional conforming practices to the subprime market
* Advancing a Mortgage Consumers Bill of Rights agenda
* Offering a broad range of alternative responsible products
* Leveraging technology to expand markets and reduce costs for consumers
* Working with our servicing partners to keep borrowers in their homes
* Providing tools and resources for the home-buyer education industry that allow educators to assist potential borrowers in preparing for homeownership and understanding the total costs associated with homeownership
* Supporting the Fannie Mae Foundation and its consumer outreach and education efforts.

We are also continuing to develop innovative products and tools for our partners to ensure that consumers with impaired credit have more alternatives. For example, Fannie Mae's Expanded Approval mortgage option and the Timely Payment Rewards® rate reduction feature -- both offered through Desktop Underwriter® -- are designed to assist consumers who have experienced past credit problems. A borrower who is recommended for approval for either of these would be eligible for an initial mortgage interest rate that is less than the rates currently available through subprime loans.

We also believe that home-buyer education is key to preventing consumers from falling victim to predatory lending practices. We continue to work with our lending and other housing partners to ensure that consumers have the resources they need when searching for a home to identify the lowest cost mortgage for which they qualify.

This is taking a leadership role in promoting responsible lending, and is working in local communities throughout the nation to help develop solutions to the problem of predatory lending.
source from http://www.fanniemae.com/