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FOR IMMEDIATE RELEASE

ICBA Cautions HUD on New Goals

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Washington, D.C. (July 19, 2004) - Fearing unforeseen interruptions in the flow of mortgage funding in the secondary market, Independent Community Bankers of America (ICBA) strongly urged the Department of Housing and Urban Development (HUD) not to overdo goals for low- and moderate-income housing.

In a comment letter today to HUD, ICBA stated that while it strongly supports the intent of HUD's goals, it is very concerned that the agency's proposal would "too narrowly allocate credit to certain market segments in a manner that could significantly damage the mortgage industry and ripple through the economy."

"HUD should work closely with Fannie Mae and Freddie Mac to develop goals that accurately reflect the market, yet challenge them to do even more to finance affordable housing," wrote Camden R. Fine, ICBA president and CEO.

ICBA also urged HUD not to set secondary goals for the purchase of loans in metropolitan areas. "We see the sub goals as an inappropriate allocation of credit that stresses home buying that could limit access to credit for consumers that seek to lower mortgage costs or improve their homes," wrote Fine, "While lower income and minority residents of metropolitan areas certainly need more financing options for affordable housing, so do lower income and minority residents of rural areas."

ICBA is also concerned that the proposed use of census tracts to identify lower income and minority borrowers in rural areas will be significantly less successful than the current method of using counties. The realities of rural lending will make it difficult for local lenders to identify and market to the lower-income and minority borrowers that HUD seeks to target through the goals.