New American Funding LO outlines how education, flexibility, and fair lending can drive new business
As more minority borrowers seek a path to homeownership, mortgage brokers sit at the front lines of systemic change, and opportunity. Stephen Moye, a loan officer with New American Funding, believes brokers must rethink how they assess risk, offer guidance, and overcome outdated stigmas in lending programs.
Moye states the industry must understand past inequities to serve today’s borrowers fairly. “This isn’t wokeism or do-gooder stuff,” he said. “It’s a legitimate stain on our country’s history. But also, it’s just good business.”
Why brokers should lead with empathy, and education
Moye’s path into the industry wasn’t traditional. “I was wanting to be a teacher,” he said. “I ended up in the mortgage business because of some college friends of mine.” That background, he says, still shapes how he approaches clients, especially those from underserved communities.
“Mortgage finance is the liberal arts of mortgage lending,” he said. “It’s all about a narrative… Buying a house is such an emotional decision.”
For brokers, this means understanding that financial decisions don’t happen in a vacuum. “You have to approach [underserved clients] in a certain way in order to benefit them,” Moye said. “Education for the loan officers is important… You have to understand these issues.”
Rethinking risk: Alternate credit and residual income models
Many borrowers, especially from minority communities, don’t fit neatly into the traditional FICO box. “Having a high credit score might mean that you have a lot of debt,” Moye said. “And that doesn’t necessarily mean you're financially responsible.”
He points to recent innovations that attempt to correct these blind spots. FHA now allows rent history to be factored into underwriting, and tools like Experian Boost can pull in streaming service or utility payments to help create a fuller financial picture. Moye also highlights how medical debt, often included in credit reports, has little correlation with whether someone will pay their mortgage on time.
Beyond credit scores, he encourages lenders to rethink how they assess debt burden. “VA loans don’t use DTI the same way, they look at residual income. And they perform really well,” he said. “Maybe Fannie and Freddie should think about adopting that model.”
He recalls helping a long-time hair braider in Southeast San Diego - an all-cash earner with deep ties to her community - buy a home through a CDFI loan that didn’t require income verification. It’s just one example, he says, of how flexibility in underwriting can open the door for more borrowers without increasing risk.
Community lending programs work - when brokers are empowered to use them
Programs under the Community Reinvestment Act (CRA) and other down payment assistance (DPA) models are designed to help close the ownership gap - but they often go underused.
“A lot of mortgage companies will offer [CRA] programs, but because they cost money… loan officers will be discouraged from offering them,” Moye said. “This is the first company where I haven’t been discouraged.”
The issue isn't just about availability, he stresses - it’s about execution and acceptance. “A lot of times, real estate agents will be [hesitant] because you have to disclose it. But if you do it right, there’s no difference in processing time.”
He notes that it’s possible to structure DPA programs in a way that doesn’t compromise profitability, “You have to get the offers accepted, and that requires that the loan officers do their job,” he said.
Moye believes progress will depend on a shift in mindset as much as on policy or product. “We should approach every client with empathy,” he said. “And we should do that regardless of whatever demographics our client base is.”
