Policy Documents

The Role of the 30-Year Fixed-Rate Mortgage in Maintaining the Pathway to Sustainable Homeownership for Hispanic Families

Janis Bowdler –
October 20, 2011

Good morning.  My name is Janis Bowdler.  I am the Director of the Wealth-Building Policy Project at the National Council of La Raza (NCLR).  NCLR is the largest national Hispanic civil rights and advocacy organization in the United States, dedicated to improving opportunities for Hispanic Americans.  I oversee our research, policy analysis, and advocacy on issues that are critical to building financial security in Latino communities, such as homeownership, consumer credit, auto lending, and financial planning.  In this capacity I have produced a number of publications on related issues, including The Foreclosure Generation:  Long-Term Impact of the Housing Crisis on Latino Families and Children; American Dream to American Reality:  Creating a Fair Housing System that Works for Latinos; and Jeopardizing Hispanic Homeownership:  Predatory Practices in the Homebuying Market.  

The NCLR Wealth-Building Policy Project promotes fair and accessible financial markets where Latino families have the opportunity to obtain assets and build wealth in a manner that will last a lifetime and can be shared with the next generation.  NCLR conducts research and analysis on public policy affecting the financial security of Latino families, such as threats to sustainable Hispanic homeownership, access to affordable financial services, and access to affordable credit.The  NCLR Homeownership Network (NHN) provides financial, homebuyer and foreclosure prevention counseling to more than 65,000 families annually. Our subsidiary, the Raza Development Fund (RDF), is the nation s largest Hispanic community development financialinstitution (CDFI).  Since 1999, RDF has leveraged more than $680 million in financing for localdevelopment projects throughout the country. This work has increased NCLR s institutionalknowledge of how Latinos interact with the mortgage market, their credit and capital needs, and the impact of government regulation on financial services markets.

I hope that today s hearing will shed light on a critical issue the viability and advantages of the 30-year fixed-rate mortgage.  For nearly eight decades, 30-year fixed-rate mortgages have put homeownership within reach of America s middle class and first-time homebuyers.  Long-term financing allows credit to be extended at a price that is affordable to middle-income families, and the fixed rate provides certainty around housing costs.  Without this flexible financing tool, homeownership will become a luxury reserved for the affluent, and the majority of families will be left without the appreciable asset that has long been the cornerstone of middle class wealth.

In my testimony today I will discuss the role of the 30-year fixed-rate mortgage and explain its advantages for homeowners.  I will also share our perspective on how to maintain a viable path to homeownership for future generations of homebuyers.