Codel: Growing Homeownership an ‘Industry Imperative’

WASHINGTON–Franklin Codel, Executive Vice President and Head of Home Lending with Wells Fargo Home Mortgage, Des Moines, Iowa, says the lending industry must adopt a different mindset in improving homeownership opportunities.

“Homeownership is very important to our country, to our communities and to individual companies,” Codel said here at the Mortgage Bankers Association’s Summit on Diversity and Inclusion. “It is no doubt the most important path to wealth for Americans. But for too many communities, the homeownership rate is too low, which impacts the ability of multigenerational families to build wealth.”

Codel cited issues such as student loan debt and other financial strains on younger people. It’s a very different situation than what we are familiar with,” he said. “And the demographics are shifting dramatically–minorities are going to figure very largely in the future. We have to get past the idea that borrowers have to have a perfect credit record and 20 percent for a down payment. There are entire groups of people who do not have homeownership in their conversations.”

Codel said Wells Fargo sees diversity and inclusion as a business imperative. “There are millions of people in this country who are ready to become homeowners, and it is on us to develop those markets,” he said.

Codel called on the industry to invest more in pre-purchase homeownership counseling. “To rise these people into homeownership, they need counseling,” he said. “I’m optimistic that it can work, and work at scale, but we are going to need to make a better effort and work better with housing counseling groups.”

Wells Fargo pays for post-decline counseling, working with borrowers who have been denied credit. “We have worked with clients in which were not qualified and helped them get to the point where they do qualify,” he said. “It’s very gratifying to get letters from borrowers who note that they weren’t ready for homeownership before, but are now.”

Codel called on the industry to continue to improve loss mitigation procedures. “The process begins when the loan closes,” he said. “The tools we provide are very important to maintaining a positive homeownership experience.”