Credit Scoring And Fair Mortgage Lending

T he Third insiaikmenl a F a F ive inslal Imeni aeries h y ihe Federal Reserve System's Martgoge Credit Farlnership Credit Scori ng CommiMee

Credit scoring is an underwriting tool used to evaluate the creditworthiness of prospective borrowers. Used for several decades to underwrite certain forms of consumer credit, scoring has come into common use in the mortgage lending industry only in the past 10 years. Scoring brings a high level of efficiency to the underwriting process, but it also has raised concerns about fair lending among historically underserved populations.

The purpose of the Federal Reserve System's Mortgage Credit Partnership Credit Scoring Committee is to collect and publish perspectives on credit scoring in the mortgage underwriting process, specifically with respect to potential disparities between white and minority homebuyers. The introductory article provided the context for the issues addressed by the series. The second article dealt with lend-ing-policy development, credit-scoring model selection and model maintenance.

The topic of the third article is how lenders oversee the practices of their third-party brokers, especially for compliance with fair-lending laws, pricing policies and the use of credit-scoring models. We solicited feedback from industry, consumer and regulatory representatives to ensure a variety of perspectives. The following individuals participated.


The Housing Advocates Inc.

Mr. Kramer is a civil rights attorney and director and co-founder of The Housing Advocates Inc. (HAI), a fair-housing agency and public-interest law firm in Cleveland. The organization, founded in June 1975, receives money from the U.S. Department of Housing and Urban Development, private foundations and various local governments. One of the programs operated by HAI is the Predatory Lending Project. The project provides legal assistance to low- and moderate-income residents to prevent predatory lending activities and other consumer fraud problems, especially in Wards 5 and 15 of the city of Cleveland. When violations of the law are identified, they are referred to private attorneys or to the Fair Housing Law Clinic. The clinic is a joint venture between HAI and Cleveland-Marshall College of Law at Cleveland State University. The program gives second- and third-year law students from Cleveland-Marshall an opportunity to work on real-life cases.

Credit Repair

Credit Repair

If You Are Interested In Raising Your Credits, You Won't Want To Miss This Page! Worried About Your Bad Credit? Fret Not! Discover Insider Secrets To Quickly Get Out Of Debt, Erase Your Bad Credit Record And Legally Raise Your Credit Score! Finally! An Info-Packed Guide To Help You Understand The Nuts-And-Bolts Of Credit Repairs And To Assist You In Increasing Your Credits In No Time! Learn Some Little-Known, But Highly Effective Tips And Tricks That Will Shoot Your Credit Score Up!

Get My Free Ebook

Post a comment