Housing Industry Hopes Obama Will Soften Mortgage Down Payment Rule

 

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Housing Industry Hopes Obama Line Will Soften Mortgage Rule

U.S. Realtors and mortgage bankers say they hope President Barack Obama’s call for streamlined mortgage rules in his State of the Union speech will help them persuade regulators not to set a strict minimum down payment for home loans.

“Right now, overlapping regulations keep responsible young families from buying their first home,” Obama said Feb. 12. “What’s holding us back? Let’s streamline the process, and help our economy grow.”

The president was speaking broadly about a variety of rules that may be hampering credit availability, according to a White House aide who spoke on condition of anonymity because the deliberations weren’t public. Still, real estate agents, mortgage bankers and others who are angling for changes to a proposed regulation requiring lenders to keep a stake in risky loans say they will use Obama’s comments to help make their case.

At issue is the so-called qualified residential mortgage rule, which six banking regulators including the Federal Deposit Insurance Corp. and the Federal Reserve are aiming to complete this year. The regulators drew protests in 2011 when they released a preliminary draft requiring lenders to keep a stake in mortgages with down payments of less than 20 percent and those issued to borrowers spending more than 36 percent of their income on debt.

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One Response to “Housing Industry Hopes Obama Will Soften Mortgage Down Payment Rule”
  1. gwen caranchini says:

    I do work with lawyers on foreclosure defense as I practiced law for 35 years. I also do some real estate and live in Ks/Mo. This is not a good idea. A large part of real estate agents are very republican and are totally in bed with the banks in my opinion and are not looking for anything but immediate gain. I am totally opposed to anything that does not strengthen minimal down payment requirements to at least 10 to 15 percent. It used to be 20 percent in the 70’s/80’s. We did not have those problems then. Based upon my experience and what I see, we lost a ton of real estate agents because they could no longer do nothing and make a lot of money. The ones remaining are hard working but they still see real estate as a god given right. It should not be. Keep the 15-20 percent minimum down payment.

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