Urges Congress to pass legislation requiring mortgage lenders to consider rent payments when determining people's credit worthiness.
Impact
The bill recognizes that certain institutions like Fannie Mae are already taking steps to consider rent payments in their underwriting processes, allowing for a clearer path to home ownership for many individuals previously deemed unqualified. However, the resolution points out that a considerable number of mortgage lenders have yet to adopt these practices. Therefore, the bill calls on Congress to enact federal legislation that would require all mortgage lenders to broaden their criteria to include rent payments as a key factor in assessing creditworthiness, potentially leading to enhanced accessibility in the housing market for lower-income residents.
Summary
Assembly Resolution No. 100, introduced in the State of New Jersey, urges Congress to pass legislation that requires mortgage lenders to factor in rent payments when assessing an individual's creditworthiness. The resolution highlights the challenges faced by lower-income renters who often lack robust credit histories and, as a result, find it difficult to qualify for a mortgage. It underscores that despite consistent rent payments that demonstrate creditworthiness, many individuals are denied home loans simply due to insufficient credit history. Some statistics indicate that there is a significant number of potential buyers who could qualify for mortgages if their rent payments were considered.
Contention
One notable point of contention surrounding this resolution hinges on the federal preemption of state laws regarding mortgage lending practices. The resolution emphasizes that New Jersey lacks the authority to mandate such changes at the state level due to existing federal regulations. Consequently, the passage of AR100 would not lead to immediate change in state law but would instead serve as a formal request to Congress. Critics may argue that this is only a symbolic gesture that does not directly empower state inhabitants while others may see it as a necessary step towards more equitable housing policies.
Memorializes congress to give "qualified mortgage" status to balloon loans held in portfolio by a bank and urges and requests the Consumer Financial Protection Bureau to expand the definition of "rural" for such mortgages