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.