In honor of Fair Housing Month, we're going over the history of the Fair Housing Act and exploring the legacy of this important piece of legislation. If you're interested in hearing our reflections on how current events and government initiatives can impact servicing and lending, you've come to the right place!
On April 11, 1968 the Fair Housing Act was passed to prohibit housing discrimination based on race, color, religion, and national origin. Although it was passed over 50 years ago, Valon’s mission is still rooted in the same principles of fairness and integrity. Our mission is to champion homeowners on their financial journey, as the partner they trust with their home and future. As a mortgage servicer who services thousands of loans for a diverse group of people across the country, we recognize the importance of basing our company values and business practices in equality.
In honor of April being Fair Housing Month, we wanted to explore the legacy of the Fair Housing Act by looking at other legislation that was put in place to address financial injustice. Because Valon is a mortgage servicer, we’re interested in how current events and government initiatives impact servicing and lending. Here are some of our reflections:
How can the pandemic affect mortgage servicers and lenders?
The pandemic changed life as we know it. After a major crisis, we often see a reevaluation of past practices that inform the “new norm.” Just like the Great Financial Crisis of 2007-2008 changed housing regulations for lenders and servicers, the pandemic may do the same for the mortgage industry. One way to start thinking about a “new norm” in the mortgage lending and service industry is to place emphasis on the laws that are already put in place to promote equality.
Servicers and Fair Lending Practices: Equal Credit Opportunity Act (ECOA), Regulation B
Under the ECOA, which was originally passed in 1974, it is unlawful for servicers to discriminate against homeowners when approving a mortgage loan modification. Discrimination based on race, color, religion, national origin, sex or marital status, or age is prohibited. In addition, servicers cannot deny a loan modification if a homeowner’s income is bolstered by any public assistance programs.
Consumer Federal Protection Bureau Mortgage Servicing Exams
The CFPB performs broad exams to ensure mortgage servicers are using fair practices when interacting with homeowners. One of their exams evaluates if a servicer’s mortgage assistance policies carry any implicit bias. These exams are a way to protect minorities against discrimination when it comes to receiving mortgage assistance.
All of these highlights focus on upholding the legacy of the Fair Housing Act. Discrimination has insidious effects that requires the persistence of legislation to help create tangible change. One way in which Valon continues the Fair Housing Act’s legacy is by focusing on putting homeowners first. In an older blog post, we went in depth about our efforts to emphasize that “the homeowner should be the utmost priority.” Regardless of background, Valon is dedicated to championing homeowners equally, in servicing, lending, and beyond.
For your future reading, we’ve compiled all of our sources below!
CFPB makes it clear: fair servicing is back, for real this time
ACI’s 5th Bank & Non-Bank Forum on Mortgage Servicing Compliance
Consumer Financial Protection Bureau Supervisory Highlights (Issue 25, Fall 2021)