But does the bill have the numbers to pass the Senate? Investment banking firm Cowen and Company believes moderate Democratic lawmakers would present an obstacle.
HMDA data show that minorities face notably higher denial rates than white borrowers, and more so if the mortgage is underwritten manually. (Includes data chart.)
The changes are being pursued in response to the agency receiving “more than 10,000 questions per year from people trying to understand the deposit insurance rules,” the FDIC chief said.
The proposed rule, for the purpose of calculating deposit insurance, would provide the same treatment for principal and interest payments made on behalf of a borrower by a third party, such as a mortgage servicer.
According to Ted Tozer, former Ginnie Mae president, the industry was warned ahead of time by the government guarantor of plans to tighten financial requirements for single-family MBS issuers.
Borrowers can still qualify for a VA-guaranteed mortgage even if they have gaps in employment due to COVID-19. Lenders are encouraged to use "good judgement and flexibility" while verifying a borrowers income.