“Hey, I have an idea! Let’s have the government encourage expanding lending to riskier borrowers. That way we can sell more houses, real estate agents can make their commissions, and when things go south, we’ll blame the lenders! Didn’t we try all that about ten years ago?…

…Okay, I will put my cynicism away, and the following verbiage has plenty of conditional statements. But what set it off was NAR’s press release that “The Federal Housing Agency is taking additional steps to expand access to mortgage credit for underserved borrowers, according to Department of Housing and Urban Development Secretary Shaun Donovan, who spoke to Realtors® today at the FHA: 80 Years and Counting – Regulatory Issues Forum during the Realtor® Party Convention & Trade Expo. Donovan said lending to potential buyers with lower credit scores has fallen dramatically in recent years and announced a new blueprint for greater consumer access to credit, through a new FHA housing counseling program that will launch later this year. The four-year, two-phase pilot program, called Homeowners Armed With Knowledge or HAWK, will offer a 50 basis point reduction in the upfront mortgage insurance premium and a 10 basis point reduction in the annual premium at the time of loan origination to first-time homebuyers who complete the program. Loans that remain in good standing will also receive reductions, which could add up to thousands of dollars in savings for homebuyers over the life of their loan.,” May 14, 2014 Excerpt from Mortgage Industry Newsletter

Posted on May 14, 2014, in Postings. Bookmark the permalink. Leave a comment.

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