Lenders Target Home Buyers With Credit Flaws

As the first deputy director of the Consumer Financial Protection Bureau, Raj Date helped write new rules for mortgage lending, including designing a qualified mortgage—one with strict credit and income requirements for the borrower and no balloon payments, among other features. In return, lenders who issue qualified mortgages will have some protection against consumer lawsuits.

What about those financially sound borrowers who don’t meet CFPB guidelines? Well, now Date is trying to build a business that will serve them. He left the CFPB last year to found Fenway Summer, a Washington-based firm that plans to provide loans, including interest-only mortgages, to borrowers he considers safe risks even if they carry debt that exceeds the agency’s proposed threshold. “The reality is it’s way too hard for good people to get loans today,” Date says.