July 8, 2008
Comptroller Dugan Supports Responsible Mortgage Lending For Low- and Moderate-Income Households
WASHINGTON — Comptroller of the Currency John C. Dugan issued the following statement after today’s Forum on Mortgage Lending for Low- and Moderate-Income Households sponsored by the Federal Deposit Insurance Corporation (FDIC):
Today, I had the opportunity to participate in the FDIC’s Forum on Mortgage Lending for Low- and Moderate-Income (LMI) Households. At the Forum, many good ideas were discussed to encourage responsible LMI mortgage lending, including the recommendations of the Committee on the Underserved of the President’s Advisory Council on Financial Literacy.
As I indicated when I recently addressed the Committee, I believe the key elements of a responsible mortgage lending product geared at LMI populations should contain four elements: (1) the product should be easy to understand and have disclosures that convey key elements of the transaction to the consumer; (2) lenders should qualify borrowers based not just on their capacity at the initiation of the transaction but over the life of the loan; (3) borrowers should have some equity in the transaction and be required to make a down payment using their own funds; and (4) the credit underwriting analysis should be flexible enough to evaluate "thin file" borrowers who can demonstrate their ability to repay recurring non-credit related obligations in a timely manner.
I support the efforts being pursued by the FDIC and the President’s Advisory Council on Financial Literacy to ensure that mortgage products remain available for Americans of all income levels with the desire and capacity to become homeowners.