Advocacy Group Urges FHA Reform

The Center for Responsible Lending on Thursday called on the Federal Housing Administration to take further action to protect consumers from what it characterized as “Wild West lending.”

"The FHA was created to make mortgages accessible, affordable, and sustainable. Without clear rules to prevent overcharging, abuses are inevitable. That undercuts the reason the program was created in the first place," said Evan Fuguet, senior policy counsel for the center, in a statement.

The CRL recommended that the FHA adopt the following policies:

· Immediately apply pending Federal Reserve rules that, come April, will ban kickbacks and other incentives to overcharge for mortgages.
· Establish reasonable limits on loan costs to prevent inconsistent and abusive pricing.
· Maintain a strong focus on access to fair and affordable credit for all families regardless of race.
· Continue to strengthen efforts to enforce FHA rules.

Source: Center for Responsible Lending (12/09/2010)