Fannie Mae Rethinks Rules Critics Labeled as Discriminatory

Boston Globe (04/24/08)
A letter from the Consumer Mortgage Coalition stating that new down-payment requirements and mortgage fees discriminate against women and minorities has prompted Fannie Mae to reconsider the new guidelines, which are effective June 1. In response to higher default rates, weak home sales and price declines, Fannie Mae plans to boost down-payments for borrowers who have low credit scores or those who are purchasing homes in declining markets by 5 percent. The coalition takes issue with the government-sponsored enterprise defining declining markets by ZIP code rather than metropolitan area, insisting that it puts certain neighborhoods at a disadvantage and will force minorities into higher-cost loans. According to Fannie Mae spokesman Brian Faith, "We have met extensively with advocates, listened to their concerns and are considering making changes to our [declining markets] policies."