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Tell Congress: 20% Down Payments Put the American Dream Out of Reach

Can new home buyers afford a 20% down payment? Could you? Can you envision what this will do to limit the buyer pool  if new regulations governing Qualified Residential Mortgages (QRM) take effect this year?

Neither can we. And neither can many elected officials in Congress who did not intend for these regulatory provisions to be so narrowly defined. We must continue our efforts to explain how detrimental the new QRM rules would be to the ongoing housing and lending crisis in America.

According to NAR Research, 60% of recent home buyers made less than a 20% down payment, and it would take 14 years for a typical person to save up a 20% down payment to buy a median-priced home.

Please contact Congress today and ask them to make it clear to the regulators that this proposed regulation was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.

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Comment by Jose Rivas (DGRA) CDPE, SFR on May 18, 2011 at 2:28pm

I have the opportunity to visit the delegates from my state with other members of NAR last week, it was a great experience, and a lot of information, this is a big issue, We all know that the government wants to eliminate Freddy and Fannie, but we really need something in its place or a way to re-vamp the system, but keeping the low down payment. 

Among other issues that we should talk to our congressman/woman and senators are:

  • The preservation of the Mortgage Interest Dedudtion for taxes. House members who haven’t yet acted should cosponsor H.Res. 25. Reducing, eliminating or otherwise changing the value of themortgage interest deduction will cause the value of housing to drop even more—perhaps by as much as 15% in some markets. This decline would be in addition to the 30% decline that some markets have experienced
  • The Short Sale bill that wants to mandate lenders to approve or disapprove a short sales within 45 days of the short sale request, and to identify ways to make short sales work better. NAR supports H.R. 1498 to require servicers to decide whetherto approve a short sale within 45 days of completion of the short sale request. 
  • Oppose mandatory increases in mortgage down payments proposed by financial regulators through narrow definition of Qualified Residential Mortgage (QRM). Submit comments to the six regulators during the comment periodand voice concern that the proposed QRM rule would deny otherwise creditworthy Americans affordable financing while further concentrating the lending industry in the mega-banks that are already “Too big to fail.”
  • Enact comprehensive legislation to restructure the secondary mortgage market in a manner that provides the federal government with a continued role in the secondary mortgage market in order to ensure a continual flow of mortgage liquidity in all markets under all economic conditions. NAR does not support H.R. 1182 and S. 693 as the legislation shutsdown Fannie Mae and Freddie Mac without offering a replacement for their secondary mortgage market mission
  • Reauthorize the National Flood Insurance Program (NFIP) to ensure access to affordable flood insurance. Since September 2008, Congress has approved nine NFIP extensions and allowed five lapses. During the June 2010 lapse, 47,000 home sales were delayed or cancelled according to NAR survey data.

 

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