FOR IMMEDIATE RELEASE
December 14, 2021
Media Contact: Izzy Woodruff | 202-898-1661 | IWoodruff@nationalfairhousing.org
NFHA Statement on the Nomination of Sandra Thompson to Lead FHFA
Washington, D.C. — The National Fair Housing Alliance (NFHA)’s President and CEO, Lisa Rice, issued the following statement in response to President Biden’s nomination of Sandra Thompson to serve as Director of the Federal Housing Finance Agency (FHFA):
“We congratulate Acting Director Thompson on her nomination to lead the Federal Housing Finance Agency (FHFA), and we commend President Biden for making such a great choice. Ms. Thompson is a consummate professional with years of proven experience and bold leadership. She is well positioned to head the Agency that, at this critical time, oversees Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and their roles in the $12 trillion mortgage market.
“Ms. Thompson is a dedicated public servant whose leadership at the Federal Deposit Insurance Corporation (FDIC) and FHFA helped to ensure the safety and soundness of the mortgage market while advancing access to mortgage credit. As Acting Director of FHFA, she initiated necessary actions to move the GSEs toward racial equity and address fair lending issues. In two of her initial actions as Acting Director, Ms. Thompson led FHFA to issue a Policy Statement on Fair Lending as well as enter a first-of-its-kind Memorandum of Understanding (MOU) with the U.S. Department of Housing and Urban Development to advance fair housing and fair lending enforcement.
“Ms. Thompson also eliminated the Adverse Market Refinance Fee to help families take advantage of low interest rates and reduce their housing costs; supported the enterprises’ efforts to include rental payment history in risk assessment processes, which allows future homeowners to benefit from positive rental payment histories; directed the enterprises to submit Equitable Housing Finance Plans to identify and address barriers to fair and sustainable housing opportunities; and published demographic data on the enterprises’ Housing Goals and Fair Lending to increase transparency on how underserved communities are being served.
“Discrimination in the mortgage market continues to plague our system, hurting communities and hampering economic growth. Today, the Black/White homeownership gap is as wide as it was when redlining was legal and, despite the passage of fair housing and fair lending laws over the last 50 years, important components of these laws have yet to be fully enforced. The current pandemic has exacerbated racial homeownership and wealth inequities as many Black, Latino, Native American, and Asian-American Pacific Islander consumers are unable to secure a mortgage or loan refinance. Meanwhile, the Federal Reserve continues to make monthly $40 billion purchases of agency-backed mortgage securities, which researchers have found do not benefit the whole housing market equally. Their analysis showed that the median Black and Latino mortgage borrower accumulated significantly less equity. Moreover, only six percent of Black borrowers and nine percent of Latino borrowers were able to refinance, to take advantage of a lower interest rate environment, compared to 12 percent of White borrowers.
“NFHA looks forward to working with Ms. Thompson to ensure that the GSEs serve the whole of the market, including underserved communities of color. We hope that she will take immediate steps to:
- Eliminate Loan Level Price Adjustments (LLPAs), which have a discriminatory effect on borrowers of color;
- Ensure that the GSEs provide liquidity for Special Purpose Credit Programs (SPCPS);
- Require the GSEs to use credit scoring systems that serve people of color equitably;
- Elevate the Office of Fair Lending Oversight to a fully staffed division to ensure fair lending goals and principles play a more prominent role within the agency and the GSEs are in full compliance with fair housing laws, including the Affirmatively Furthering Fair Housing provision of the Fair Housing Act;
- Embrace innovative technologies and strategies designed to significantly reduce, and ultimately eliminate, bias in algorithmic systems;
- Adopt a Regulatory Capital Framework that promotes racial equity; and
- Increase transparency regarding the enterprises’ fair lending examination findings.
“Seven out of 10 future homebuyers will be people of color, and reports show that addressing discrimination and eliminating racial inequality, including in housing and financial services, can help ignite the economy by adding $5 trillion to the nation’s GDP over a five-year period. Every action must be taken to ensure that the borrowers upon which the system depends can safely access lower cost conventional mortgage loans and we move closer to achieving the Biden-Harris administration’s racial equity goals.”
The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.