The US Congress is busy trying to figure out how to regulate the Mortgage Banking Industry so that another Subprime Meltdown never happens, and that is a good thing.
But, they are the Government, so how do you see this working out? Yeah, me neither.
US Congressman Scott Garrett (R-NJ) recently introduced the “FHA Taxpayer Protection Act of 2009.” In his bill, borrowers would be required to make a 5% downpayment on FHA loans, as opposed to the 3.5% downpayment in the current guidelines.
In a Press Release Garrett states:
“Homeownership is a noble goal. However the benefits of Homeownership using government subsidies must be balanced against the potential risk of insuring less creditworthy borrowers and exposing the American taxpayer to that risk. As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage.
I know there are those in this area who believe that Congressman Garrett is on the right track with his Bill… I strongly disagree with you. In the Triangle (RDU area) we are sitting in the middle of 21 Universities and Colleges. We are a mecca for Research and Technology jobs. We are attracting young, hard working, EDUCATED first time homebuyers. And this particular segment of the market is helping us keep our home values in place – because they are buying.
ANYTHING we do to disrupt this current, qualified buyer is a mistake – for ALL of us. We have too much inventory, banks are taking homes back everyday (contributing to that Housing Inventory), we should be ENCOURAGING them to purchase homes – especially now!
If you are interested in purchasing a home in Wake County, Durham County, Orange County or Johnston County, and want more information on qualifying for FHA loans – please call Steve and Eleanor Thorne, 919-649-5058. We are Professional Mortgage Planners with more than 20 years experience and the lowest mortgage interest rates!