From the National Association of Realtors through Edward E. Cambas.
Recommendation 1: Do Not Risk Weakening Our Nation’s Housing Markets Any Further
• Recraft the Qualified Residential Mortgage rule mandated by the Dodd-Frank Act to include a wide variety of traditionally safe, well documented and properly underwritten products. Requiring a 20% down payment coupled with stringent debt-to-income ratios and rigid credit standards – as defined under the proposed rule by six federal regulators – would be detrimental to prospective home buyers, especially first-time and middle-income buyers.
• Restore higher loan limits supported by FHA and the GSEs to provide liquidity in housing markets and to assure mortgage financing options while stabilizing local housing markets. On September 30, the loan limits in 669 counties and 42 states declined. Already, this has had a harmful impact on our fragile housing recovery. Sellers have had to lower their price in markets where mortgages backed by FHA and the GSEs are no longer available. Buyers are confronting higher mortgage rates and larger downpayments because only private mortgages are available in these high-cost markets. In some instances buyers have given up their home search entirely.
• Resist proposals that call for changing the tax rules that apply to homeownership now or in the future. Without a doubt, now is not the time to change the mortgage interest deduction or any other housing incentives. Making gradual or targeted changes would send the wrong signal further undermining confidence and further depressing home values.
• Recraft the Qualified Residential Mortgage rule mandated by the Dodd-Frank Act to include a wide variety of traditionally safe, well documented and properly underwritten products. Requiring a 20% down payment coupled with stringent debt-to-income ratios and rigid credit standards – as defined under the proposed rule by six federal regulators – would be detrimental to prospective home buyers, especially first-time and middle-income buyers.
• Restore higher loan limits supported by FHA and the GSEs to provide liquidity in housing markets and to assure mortgage financing options while stabilizing local housing markets. On September 30, the loan limits in 669 counties and 42 states declined. Already, this has had a harmful impact on our fragile housing recovery. Sellers have had to lower their price in markets where mortgages backed by FHA and the GSEs are no longer available. Buyers are confronting higher mortgage rates and larger downpayments because only private mortgages are available in these high-cost markets. In some instances buyers have given up their home search entirely.
• Resist proposals that call for changing the tax rules that apply to homeownership now or in the future. Without a doubt, now is not the time to change the mortgage interest deduction or any other housing incentives. Making gradual or targeted changes would send the wrong signal further undermining confidence and further depressing home values.
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