National Association of Realtors President Chris Polychron talks to Congress about Mortgages
Chris Polychron talked to Congress recently about the tight restraints in the Mortgage Lending arena. The U.S. toughened mortgage lending standards in the wake of the housing meltdown to hopefully prevent a repeat performance. A lot of people in the real estate industry feels the pendulum has swung to far to the safe side. It is so hard sometimes to qualify an individual to get a home loan even though their credit is good, credit worthy homebuyers are failing in the American Dream of homeownership.
At a time when mortgage rates are unbelievably low more first time homebuyers should be taking advantage of, and succeeding in securing lending to purchase their home. In a lot of cases well intentioned , but over-corrective policies are ruining the opportunity for possibly millions of Americans trying to obtain a home loan. The NAR, and it's members feel, that we have yet to strike the correct balance between regulation and opportunity.
Because of this, first time home buyers is at its lowest point since 1987, in light of some of the lowest interest rates this country has seen. Also, homeownership rates have sunk to levels almost similar to that of 1990.
Some changes Mr. Polychron suggested were in the area of Condos. Less restrictive condo policies by the Federal Housing Administration (FHA) and Fannie Mae & Freddie Mac. This would ease the entry for a lot of entry level first time homebuyers, condos are frequently a first step approach to beginners in the Real Estate market.
Other suggestions were made regarding the upcoming changes to RESPA - Real Estate Settlement and Procedures Act - rules getting ready to roll out this August 1st which will impact closing dates and scheduling. Also the high guarantee fees that Fannie Mae & Freddie Mac charge to cover the loan in the event of a future default are impacting the Housing Market recovery. The higher fees make it harder for homebuyers to qualify and essentially raises the cost of homeownership.
Article obtained from the National Association of Realtors