One of our frequent laments over the past year has been the lack of diversity in the mortgage lending market. Fannie Mae, Freddie Mac, and the FHA back more than 90 percent of all new loans today, up from a third five years ago.

Unfortunately, the level of diversity might not be rising soon. reports that regulators are pushing for lenders who offer high-risk mortgages to hire certified, licensed appraisers to conduct interior property inspections. (A high-risk mortgage is defined as one secured by a home with an interest rate above a certain threshold.) What's more, if a seller acquires this high-risk property for a lower price within six-months, an additional appraisal must be supplied at no cost to the consumer.

Basically, the regulators' proposal would raise the cost of higher-risk loans, which means there will be fewer of these loans. In turn, higher costs could make lenders even more risk averse, which would further shrink the pool of potential home buyers.

At this point, we think it makes financial and economic sense for lenders to venture further out on the risk scale. We understand the concerns, given the number of loans that went sour a few years ago. But today, there are simply too many potential borrowers relegated to the sidelines because of excessive risk aversion and its accompanying regulatory costs.

Prudent and thoughtful lending doesn't mean eschewing risky lending, it means approaching risky lending with intelligent underwriting procedures.

Courtesy of Jessica Regan.

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