BOSTON -- A top Administration official urged mortgage bankers to sign voluntary agreements with the federal government to increase their lending to minority Americans.
Speaking at the annual convention of the Mortgage Bankers Association here on Monday, housing and urban development secretary, Henry G. Cisneros, praised the trade group's leaders for reaching a master agreement with his agency, but said it was time for the "next level."
"The agreement we signed with the MBA is a model for your industry," Mr. Cisneros said.
"Now it is time to take it to the next level: specific agreements with the mortgage banking companies who originate the loans that really put people into homes of their own," he said.
He disclosed that three companies are currently negotiating individual agreements with HUD. The companies are Norwest Mortgage Inc., Collateral Mortgage Ltd., and Inland Mortgage Corp.
Countrywide Funding Corp., which last month concluded the first and only agreement so far, formally signed its deal on Wednesday.
The agreement commits Countrywide to making 5% more loans to minorities next year than it did in 1993.
It outlines a series of "best practices," such as consumer outreach, that the company will use to boost minority lending.
Mr. Cisneros emphasized that his agency was urging lenders to go after good business, not make risky loans.
"It's been suggested by some observers that the administration is running some kind of bank raid, asking the private sector to subsidize people because the federal government can't or won't commit its own resources," he said. "We are not asking you to take up our slack...to write bad loans, or take unacceptable risks."
Though the government cannot enforce the terms of its individual agreements with companies, it faces an uphill battle in convincing mortgage bankers to make such deals.
By and large, mortgage bankers are suspicious of any deals with the government that would involve their setting lending and hiring goals, and open them to even its nonenforceable scrutiny.
Despite Mr. Cisneros' pitch, the outgoing MBA president, Stephen B. Ashley said he did not believe that the federal government would escalate pressure on the industry to make such deals.
Asked what he thought Mr. Cisneros meant by moving to "the next level," Mr. Ashley said he thought it was simply a reference to advancing the process to the individual lender level.
The MBA is the only trade group to enter a broad agreement with the housing agency.
The banking trade groups are bitterly opposed to the idea, fearing that they would expose themselves to regulation by yet another federal agency.
