A Ford Foundation supported initiative—the Fair Mortgage Collaborative—has begun certifying lenders as “fair and safe” based on audits of their mortgage products. Certified lending networks will also offer the approved products. The group’s founding members include Shorebank Corp., Prime Alliance Solutions, and 19 other organizations including secondary market intermediaries, advocacy groups, and foundations.
The audit is guided by several core principles, says FMC executive director Howard Banker: “Lenders have to work for customers. There’s no steering, no predatory loans are allowed, and nonstandard loans must have clear and compensating consumer benefits.” FMC will keep its rules and standards current for new product types. “We look under the hood,” Banker adds.