April 2009

Tough Mortgage Regulations Proposed

A major mortgage association has proposed tough, new legislation that would establish a federal regulatory framework for mortgage lending to protect borrowers nationwide. In a letter, sent by the Mortgage Bankers Association to several political leaders, it was proposed that a plan be developed that would create new uniform national lending standards to replace the current patchwork of state and federal lending laws, and would establish a new federal regulator to implement and enforce these standards.

"In order to restore confidence in the housing and mortgage markets, we need to ensure that many of the excesses that led to the current crisis aren't repeated," said John Courson, MBA president. "For this reason, we are calling on Congress to create a new national regulatory framework to better protect consumers."

First-Time Buyers Driving Home Sales Market

The American dream of owning a home is still alive and well, even as the recession deepens. This was clearly seen in a recent home sale report from the National Association of Realtors. It showed a significant increase in sales of existing (previously owned) homes, and about half of purchasers are first-time home buyers. Condominium sales are particularly strong.

Those first-timers often make substantial sacrifices in purchasing their first home, but they consider owning a home as a key part of achieving their personal and financial goals. And, of course, they want to enjoy pride of homeownership, as experienced by their parents and grandparents.

The key motivators for today's first-time buyers are the recently offered $8,000 tax credit, record low mortgage interest rates, and the numerous bargain-priced homes on the market, many being those in foreclosure or pre-foreclosure status. Also, first-time buyers often take advantage of special financing plans available to them. Those first-time buyers are the primary driving force behind today's increasingly active home sale market.

Source: Crystal Kachmar