Author: Marino, Dennis
Summary
This is another in a series of papers analyzing publicly initiated reinvestment strategies which have been attempted at the federal, state or local level. This paper describes the role of mortgage bankers in pro viding single-family mortgages insured by the Federal Housing Administration (FHA) to moderate income homebuyers. It also elucidates the concerns of critics of mortgage bankers and describes the Illinois Mortgage Banking Act, a product of the efforts of these critics, and individuals and organizations desiring prudent examination of the accusations against mortgage bankers. The paper also includes comments by representatives of the Illinois mortgage banking industry concerning the Act. HUD-FHA mortgage approval procedures and the Florida Mortgage Brokerage Act are also briefly described.
The concluding section of the paper expresses a concern that the implementation of Illinois Mortgage Banking Act, and future initiatives of other states, should be carefully structured to avoid the creation of disincentives which discourage mortgage bankers from originating and servicing FHA-insured loans. FHA-insurance programs have provided homeownership opportunities to many moderate-income households and residents of certain geographic areas perceived as high risk by conventional lenders. These programs will hopefully be able to continue to serve this function in Illinois and other states desiring to initiate regulatory action.
Download
