§4601 Review of Underwriting Guidelines

Summary

Each enterprise must study its underwriting rules. The study must check three things: whether the rules stop the enterprise from buying or bundling mortgages for housing in mixed-use areas, urban centers, predominantly minority neighborhoods, and for low- and moderate-income families; whether private mortgage insurers’ rules block those purchases; and what would happen if underwriting allowed a 5 percent or smaller downpayment, let cash on hand be used for downpayments, and accepted borrowers with past delinquencies who show a satisfactory 12-month credit history ending on the mortgage application date. Not later than the expiration of the 1-year period beginning on October 28, 1992, each enterprise must send a report on the study to the Secretary, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate. Each report must include any recommendations for better meeting the housing needs of low- and moderate-income families.