NAACP Swipes at Corker-Warner Bill

A statement issued from Hilary O. Shelton, SVP for advocacy for the ""National Association for the Advancement of Colored People"":http://www.naacp.org/ (NAACP), reveals that the organization strongly believes homeownership to be the critical gateway towards creating safer and more stable, secure communities, especially in generating and maintaining income within communities of color.

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In her statement, Shelton notes that recent government policies have centered more on Wall Street and banks rather than helping the middle-class or lower income population. Minorities in particular lost out when the housing collapse of 2007 caused home values to sharply fall. Despite this obvious need, Shelton says the industry is still seeing little to no public policies offering assistance and some that may even roadblock the path to homeownership.

The NAACP, in light of this awareness of upcoming threat, applauded President Obama, enthusiastically supporting his refusal to endorse the Corker-Warner legislation, a bill that would remove the institutions of Fannie Mae and Freddie Mac and replace the Federal Housing Finance Agency (FHFA) with yet another government backstop, both of which they see as posing a direct threat to the middle-class and minorities' financial well-being and ability to own or finance homes.

Historically, up until the 1930s, home mortgages were only available to those elite upper class individuals who could afford the short-term loan requirements. However, following the Great Depression, the U.S. enacted the 30-year mortgage, making homeownership accessible to more people. Federal support via Fannie Mae and Freddie Mac, as well as the FHL Bank, was a big part of making that mortgage a reality by supplying mortgage interest deduction and other incentives. With this implementation came a growth in homeownership, building stronger middle-class communities.

It is due to this fact that the NAACP are wary of a sudden shift, as any restructuring of the housing finance industry must sustain homeownership opportunities for the next generation. Yet with the new bill, the NAACP sees policies that would make it virtually impossible for many in the middle class--and particularly people of color--to purchase homes in the future.