A Good Day For Housing!
Today is a good day for housing, noted the National Association
of Realtors. On the same day that the Federal Reserve cut the
discount rate by half a percentage point, the U.S. House of
Representatives has passed the Expanding American Homeownership Act
of 2007, H.R. 1852. The legislation will offer home buyers a
safer alternative to risky mortgage products and help
many homeowners who may be facing foreclosure, and the combination
of efforts could have a positive impact on the housing market and
consumer confidence.
While some homeowners are faced with mortgage payments they can
no longer afford as their adjustable subprime loans reset, a
reformed FHA is positioned to offer borrowers a safer mortgage
alternative and help bring stability to local markets and local
economies.
As the leading advocate for expanding homeownership
opportunities, NAR has long supported FHA modernization legislation
that increases loan limits, eliminates the statutory 3 percent
minimum cash down payment, and gives FHA the flexibility to provide
risk-based pricing. NAR also supports the continued
availability of FHA loss mitigation programs. We are pleased
that this bill contains all of these important enhancements.
FHA's loss mitigation program includes mortgage
modifications, allowing borrowers to change the terms of their
mortgage so that they can afford to stay in their home. The
program also offers "partial claim" programs in which FHA lends the
borrower money to cure the loan default. This no-interest
loan is not due until the property is sold or paid off.
Eliminating the 3 percent minimum down payment will help many
buyers into homes, as will increasing FHA-insured mortgage loan
limits, which will help first-time home buyers, minority buyers and
others who cannot qualify for conventional mortgages. People
who live in high-cost areas will benefit as well, since low limits
currently preclude many of these buyers from using FHA-insured
mortgages.
Source: NAR/Skye
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