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Responsible Banking Act Public Hearing Testimony

Remarks presented by Ken Inadomi on Wednesday February 18th at the Responsible Banking Act public hearings at the Department of Health, 125 Worth Street, New York City.

Committee Members and fellow housing colleagues, thank you for the opportunity to share these remarks regarding the implementation of the Responsible Banking Act.

My name is Ken Inadomi and I am the Executive Director of the New York Mortgage Coalition, a nonprofit housing agency dedicated to creating and protecting first-time homeownership opportunities for low and moderate income families in New York. The Mortgage Coalition is a unique network, comprising 24 member organizations – 11 nonprofit housing agencies and 13 lending institutions — working in concert to help underserved families seeking affordable first-time homeownership.

Since its founding in 1993 the Mortgage Coalition has provided homeownership education to more than 45,000 low and moderate income families, guiding 10,000 of them through the purchase of their first homes, while maintaining an overall foreclosure rate of under 2%. The key underlying factor driving this loan performance is our rigorous 8 to 12 hour homebuyer education program that borrowers are required to complete BEFORE closing.

The banks of New York City were the founders and remain the cornerstones of the Mortgage Coalition. They provide the loan officers who advise first-time homebuyers; they provide grant support to help fund trainings, home fairs, and housing expos; they participate in first-time homeownership programs including those sponsored by SONYMA and the Federal Home Loan Bank of New York which offer down payment and closing cost assistance; and they provide the CRA officers and executives whose leadership helps strengthen our nonprofit boards.

For all of this we are grateful and we hope these practices continue – but can MORE be done?

Of course more can ALWAYS be done when we’re talking about the housing needs of working class families in New York. I understand that many ideas have already been presented over the past two weeks of hearings, so let me share just three recommendations for the Committee’s consideration to advance the cause of affordable homeownership.

The first is that we encourage more lenders to develop portfolio loans or loans that are held on their books. Portfolio loans can increase underwriting flexibility while eliminating the need for borrowers to go further out of pocket to pay mortgage insurance. Only a few lenders offer a portfolio product and we’d like to see more of this.

Second, we welcome New York’s banks to take a more aggressive stance in preventing foreclosed properties from being sold to investors and speculators with no intent to live in the properties. Countless studies confirm the positive correlation between homeownership and neighborhood stability, safety, and property value.

And last, with the Responsible Banking Act we in New York City once again have the opportunity to set an example for the rest of the nation to follow – to design a system in which banks give back to communities in proportion to what they take in. Let’s not squander this golden opportunity to implement meaningful social change and to create a paradigm for other cities and states to emulate. Many thanks for your consideration.