WASHINGTON – April 2, 2015 – A diverse group of housing industry stakeholders participated in a credit access symposium today to discuss how alternative credit scoring models could expand access to mortgage credit for responsible borrowers who may have thin credit histories or extenuating circumstances like medical debts.
The event, co-hosted by the National Association of Realtors® (NAR), the Asian Real Estate Association of America and the National Association of Hispanic Real Estate Professionals, included two roundtable discussions and a keynote address from Secretary of Housing and Urban Development Julián Castro.
“Realtors support safe, responsible access to mortgage credit for borrowers who can show they are ready and able to own a home and keep up with monthly payments,” said NAR President Chris Polychron. “Unfortunately, overly restrictive lending, except to buyers with near-pristine credit scores, prevents many otherwise qualified buyers from entering the housing market.”
NAR first called on federal regulators and the credit and lending communities in 2011 to reassess the entire credit structure and look for ways to increase the availability of credit to qualified borrowers who are good credit risks.
Work by the Harvard University Joint Center for Housing Studies indicates that borrowers with lower incomes as well as minorities face higher rejection rates on their mortgage applications. NAR analysis of mortgage data from 2007 to 2013 indicates that the share of rejected loans due to credit scores was significantly higher for African Americans and American Indians.