The five-year anniversary of the Consumer Financial Protection Bureau is coming up this summer – July 21, to be exact – and few can argue the impact the CFPB had on the financial industry in these four-plus years. From the recent implementation of the CFPB’s TILA-RESPA Integrated Disclosures rule, to the national mortgage servicing rules, the Ability-to-Repay rule and the Qualified Mortgage rule, just to name a few, the CFPB seismically changed the face of mortgage lending, with rules and enforcement actions as well. It’s not just mortgage lending that’s changed. The financial industry as a whole has undergone significant changes since the CFPB began operating in 2011. And the CFPB is far from being done with reshaping the financial industry.
So you say you want to buy a home but you’re locked out of the market because you don’t have enough money for a down payment. Or you don’t have adequate savings to meet lenders’ requirements on financial reserves. Or you have a “thin” credit file that lenders find tough to score and accept. Understood. But have you checked out what’s been going on in the mortgage market lately? Are you aware of the multiple low-down-payment, consumer-friendly new options that have been launched recently? Here’s a quick overview. Pushed by regulators and consumer groups to expand home loan opportunities for first-time and moderate-income buyers, major mortgage players have come out with nationwide programs designed to turn renters who are creditworthy — but don’t have big down payments or closing-cost cash — into homeowners. Major mortgage players have come out with nationwide programs designed to turn renters who are creditworthy — but don’t have big down payments or closing-cost cash — into homeowners.
High-cost lenders are targeting these communities, preventing them from building wealth to pass on to their children. Despite the housing bust and its lasting implications, owning a home nevertheless remains one of the most common ways for American families to build wealth—white families, predominantly. The homeownership rates of black and Hispanic Americans lag dramatically behind that of white Americans. These minority groups are much less likely to purchase a home, and if they do, they are less likely to have homes that appreciate in value. They’re also more likely to lose their homes through foreclosure. These gaps help explain, in part, the staggering disparity in wealth between whites and people of color.
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