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FANNIE MAE'S JOHNSON SAYS MORTGAGE FINANCE SYSTEM MUST ELIMINATE DISCRIMINATION, PROVIDE MORE CREDIT FOR LOW- AND MODERATE-INCOME FAMILIES

 E? MAE'S JOHNSON SAYS MORTGAGE FINANCE SYSTEM MUST
 ELIMINATE DISCRIMINATION, PROVIDE MORE CREDIT
 FOR LOW- AND MODERATE-INCOME FAMILIES
 WASHINGTON, May 7 /PRNewswire/ -- The Federal National Mortgage Association (Fannie Mae) (NYSE: FNM) is extending the benefits of its charter "faster and farther to lower income families and others who are under-served than ever before in its history," according to the company's chairman and chief executive officer.
 At the same time, "many Americans, especially blacks and Hispanics, do not have equal access to home loan credit under the current mortgage finance system," James A. Johnson told a congressional panel. "Working together, we must change this. I believe we can."
 Johnson testified before the House Banking Committee, which held hearings today to examine why many minority and lower income families are not gaining adequate access to home mortgage credit. The issue was first spotlighted by new data gathered under the Home Mortgage Disclosure Act (HMDA), and released by the Federal Reserve last October.
 "We have the data that allows us to see the problems more clearly. ... And we see two distinct problems," Johnson said. "First, we see clear evidence that low-income minority communities are under-served by our housing system, leaving us to sort out how much of this under-service results from discrimination and how much from status.
 "Second, we see evidence that there are a significant number of prospective home buyers in this country whose only barrier to achieving their dream of homeownership is not their economic status, but their racial status," he said.
 Johnson said Fannie Mae views the new HMDA data as a tool to help identify and root out the causes of discrimination in housing and help design and deliver more effective home mortgage products and services for under-served communities. Combined with a renewed public focus on unmet housing needs, the new data can serve as a road map to guide efforts on resolving these problems, he said.
 "The tools we now have provide us with what we need to take a big step in solving both the problems," Johnson said. "We are at a historic crossroads in our country for dealing with these problems."
 Johnson outlined for the banking committee the actions Fannie Mae already is taking to attack the problems of discrimination and the availability of mortgage credit to lower income families.
 Last March, Johnson announced a new $10 billion affordable housing program to augment the company's everyday business activities, which helped a record 1.7 million low-, moderate- and middle-income families in 1991.
 "Fannie Mae also has initiated a Community Outreach program to serve the very people that HMDA data indicate may not have full access to credit," Johnson said. The company's efforts include actively reaching out to minorities with information that will help them understand better the mortgage process and the opportunities available to them.
 At the hearing, Fannie Mae officials demonstrated a new computerized mapping and data tool to help lenders supply affordable housing. "FannieMaps" uses census and other federal data to depict lower income and minority neighborhoods in large metropolitan areas in all 50 states.
 "We seek partnerships with local, state, and federal government, with lenders, community groups, Realtors, home builders and any one who wants to do something about the problems we are discussing today," Johnson said. Fannie Mae already is involved in 600 affordable housing partnerships in communities across the country.
 "In our community lending, we are working with our lenders to better understand the specific reasons why low-income and minority applicants are failing to qualify for loans," Johnson said. In Fannie Mae's community lending programs, the company is making its underwriting more flexible and using low down payment options to increase mortgage credit for those in greatest need.
 "Fannie Mae is taking a leadership role in sponsoring more innovative research to develop the data needed to better identify the causes of the problems," Johnson said. The company is investing substantial staff resources and budget dollars for this research effort. This includes new internal systems to provide new information about borrowers, which will help the company better identify who Fannie Mae is -- and is not -- serving.
 "There is a convergence of forces that signals, perhaps for the first time, that real progress can be made in ending housing discrimination and serving low-income borrowers," he said. "The institutional resources of the housing finance system are being corralled to provide benefits to those most in need and to end discrimination."
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company and the nation's largest investor in home mortgages.
 -0- 5/7/92
 /CONTACT: David Jeffers of Fannie Mae, 202-752-5962/
 (FNM) CO: Fannie Mae ST: District of Columbia IN: FIN SU:


TW -- DC014 -- 7573 05/07/92 11:18 EDT
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Date:May 7, 1992
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