NAR to Congress: Ease Up on Mortgage Credit

Everyone who calls themselves a REALTOR, such as myself, does so because they are a member of the National Association of Realtors. They are a national advocacy group for those of us in the real estate profession. Not only are they looking out for the best interest of Realtors like me, but also for the average home buyer and seller. NAR testified before the U.S. Senate Banking, Housing and Urban Affairs Committee yesterday to urge our legislators to have banks ease underwriting requirements for borrowers to make it easier to get a loan. Yes, on one hand we want tougher standards on banks so we don't have a repeat of the 2008 housing collapse where by banks were issues out loans to unqualified borrowers, BUT on the other hand, we don't want banks to go too far. If the banks make it too burdensome for buyers to obtain financing, then that will impact the market negatively - something nobody wants to see.



NAR to Congress: Ease Up on Mortgage Credit

Credit-worthy borrowers are being denied a chance at home ownership due to "unnecessary regulatory burdens" that are preventing them from qualifying for a mortgage, National Association of REALTORS® leaders testified Thursday before the U.S. Senate Banking, Housing and Urban Affairs Committee.

"REALTORS® support strong underwriting standards to protect consumers from the risky lending practices of the past, but we are concerned that the pendulum has swung too far," NAR President Chris Polychron testified. "In some cases, well-intentioned, but over-corrective policies are severely hampering the ability of millions of qualified buyers to purchase a home. I believe, and our members believe, that we have yet to strike the right balance between regulation and opportunity."

Mortgage rates continue to hover near historical lows, yet the number of first-time buyers entering the market is at its lowest point since 1987. The number of homes purchased annually is less than 70 percent of what was purchased prior to the real estate boom and the subsequent collapse, NAR states.

"No one wants to see a return to the unscrupulous, predatory lending practices that caused the Great Recession, but some modifications to existing regulations would help restore the home ownership rate to pre-bubble levels," Polychron said.

Polychron proposed adjustments to several regulations that he said would still ensure safe access to mortgage credit. For example, he urged changes to restrictive condominium polices from the Federal Housing Administration and the Government-Sponsored Enterprises, which he says are limiting opportunities for buyers to own condos. Condos often represent the most affordable buying options for first-time home buyers and minorities.

Polychron also urged the Consumer Financial Protection Bureau to conduct more lending from responsible community banks and provide more flexibility for lending in small specialty markets, such as rural communities.

Polychron voiced the association's support of the Mortgage Choice Act, bipartisan legislation that redefines a provision in the Ability-to-Repay rules that limits mortgage fees and points to 3 percent in order for home loans to be considered "Qualified Mortgages." Polychron urged the Senate to approve the legislation, following the House of Representatives' passage of the act earlier this week.

Currently, the rules "unfairly prevent consumers from obtaining Qualified Mortgage loans through certain affiliated lenders whose joint venture services are collectively counted against the cap, while individual services from large retail financial institutions are each capped separately," according to NAR's testimony. "The discrimination in the calculation of fees and points is being felt by consumers, including lower-end buyers, who are seeing reduced choices and added obstacles in their transactions."



Source: National Association of Realtors via RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/04/17/nar-congress-ease-up-mortgage-credit?om_rid=AAFmZk&om_mid=_BVMVEuB9A4eKHv&om_ntype=RMODaily