FOR IMMEDIATE RELEASE
April 19, 2023
CONTACTS: Americans for Financial Reform, William Pierre-Louis, Jr. (william@ourfinancialsecurity.org); National Consumer Law Center, Stephen Rouzer (srouzer@nclc.org)
Federal Housing Finance Agency to Codify Collection of Mortgage Applicants’ Language Preference
WASHINGTON – The Federal Housing Finance Agency’s (FHFA) proposed rule to codify several existing measures to ensure a fair and accessible housing finance system will require housing giants Fannie Mae and Freddie Mac (the Enterprises) to collect and report information about mortgage applicants’ language preference, according to Americans for Financial Reform Language Access Task Force members.
“Today’s action from FHFA codifies an essential practice that increases language access in the mortgage market. Asking for language preference combats discrimination against borrowers with limited-English proficiency and makes homeownership more accessible for millions of people,” said Emily Hirtle, senior policy associate at Americans for Financial Reform.
FHFA also aims to formalize existing programs regarding fair lending oversight and the maintenance of Equitable Housing Finance Plans. The proposal also expands fair lending compliance requirements and transparency and oversight for the Equitable Housing Finance Plans.
“FHFA’s announcement is an important step toward a more equitable housing market,” said Alys Cohen, senior attorney at the National Consumer Law Center. “Codifying the collection of language preference is a watershed moment for expanding access to conventional mortgage lending. By strengthening fair housing oversight and equitable housing finance programs, Fannie Mae and Freddie Mac, which serve around half of all mortgage borrowers, will make homeownership more available to underserved communities.”
Nearly one in 12 American adults has limited English proficiency (LEP). Mortgage lenders and servicers should be required to develop policies to ensure that LEP borrowers are not excluded from housing finance or misled into signing predatory agreements that they never had the chance to understand. Codifying the requirement that the Enterprises collect and report language preference, as well as housing counseling information, will ensure that mortgage lenders and servicers have the necessary information to better serve LEP consumers.
“Today, FHFA takes an important step to increase economic opportunity for Latinos with limited-English proficiency. Codifying the collection and reporting of language preference will improve how the housing market serves prospective Latino homeowners and achieve a more dynamic housing market,” said Susana Barragán, policy analyst at UnidosUS.
“Collecting information about borrowers’ language preferences is a fair lending best practice, and we commend FHFA for codifying it as part of the structure of our mortgage market. With its actions today, FHFA is helping make sure that borrowers who are not proficient in English are better able to navigate the complex mortgage process safely and fairly,” said Debby Goldberg, vice president at the National Fair Housing Alliance.
“The codification of language preference collection and reporting, and the strengthening of equitable housing commitments by Fannie Mae and Freddie Mac, is a major win for many underserved prospective home buyers, particularly for those who are limited English-proficient (LEP),” said Anju Chopra, director of policy at National CAPACD. “We look forward to next steps and ensuring that LEP communities are better served as a result.”
With language preference information, the Enterprises can help direct in-language resources to consumers who need them and ensure the availability of necessary data on language needs. Combining this change with enhancements to FHFA’s fair lending and consumer protection oversight and the Equitable Housing Finance Plans will ensure that the Enterprises and mortgage lenders and servicers can respond to mortgage borrowers’ changing needs, including their language needs. Increased structure in the fair housing oversight system and the Equitable Housing Finance Plans will promote a more vibrant, diverse housing market.
“We commend FHFA for elevating the needs of consumers with limited English proficiency and for prioritizing fair lending to achieve a more equitable housing market,” said Ruth Susswein, director of consumer protection at Consumer Action.
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Americans for Financial Reform (AFR) is a nonpartisan and nonprofit coalition of more than 200 civil rights, consumer, labor, business, investor, faith-based, and civic and community groups. It was founded in the wake of the 2008 financial crisis and its mission is to fight to create a financial system that deconstructs inequality and systemic racism and promotes a just and sustainable economy. The AFR Language Access Task Force promotes market access for consumers with limited English proficiency through advocacy for data collection and reporting, written disclosures, oral interpretation and culturally sensitive materials.