Location – All across America
Dateline: 06.27.11
Congress is at it again.
Sometimes the hardest thing to wrap our minds around is the truth, especially when it doesn’t make sense.
This is one of those moments.
Currently there is a bill afloat (the Dodd–Frank Act) that would devastate our recovering housing market.
Here it is in a nutshell: Congress is considering legislation that would mostly stop lending to any homebuyer who does not put down 20 percent toward the purchase of their home. QRMs (Qualified Residential Mortgages) are being argued by the FDIC as a solution to the weak housing market.
It is the united position of Realtors across America that QRMs are a far bigger problem in the making. Last year 69 percent of Americans who bought a home put down less than 20 percent. Most of you reading this did not put down 20 percent when you bought your home.
Yes, the housing market is beset with problems. As the cornerstone of both the economy and the American Dream, these problems are evident everywhere.
Twenty-three percent of America is upside down in their mortgages (meaning they owe more than their home is worth), and prices have fallen across the nation.
WE the people, are beat up, but not beaten. Prices are stabilizing. Americans are taking stock, figuring out where they individually stand, and making life work in the new world that includes a tighter credit market.
Additionally, problems aside, the huge majority of Americans are current in mortgage payments, including those who put down less than 20 percent and those who are upside down.
“Responsible lending standards and ensuring a borrower’s ability to repay have the greatest impact on reducing lender risk, and not high down payments,” said National Association of Realtors president Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.
Money is hard to get. Qualifying for a loan is the biggest challenge a current buyer faces in our free market. There is no loan being made to anyone who doesn’t qualify and doesn’t have good credit.
Borrowing standards have already adjusted. Now, Congress wants to curtail lending to more than two-thirds of Americans who are credit worthy and ready to buy. This will also affect your ability to sell, and your home’s value.
With fewer people able to buy, prices fall. It’s not the money being put down, it’s the guy borrowing that matters. Period.
Seems to me, every time Congress has a knee-jerk reaction we wake up to a weaker America. It’s time to bolster America, and rebuild, not further restrict. But, I’m only one American. What do you think? Let your U.S. Senator and Congressman know.
Geoff Rosenberger is a Broker Associate at Marketplace Realty. Read more of the new acweekly.com columnist, Atlantic City resident and self-proclaimed visionary's "Geoff's Page," including local snap shots, thoughts, Atlantic City news, random musings, GLBT-related news, The Real Report, and happenings every week — only at acweekly.com.
E-mail Geoff at geoffrosenberger@comcast.net or call him at 609-385-7585.
Nothing about real estate is like it should be, but it’s better than you might think.
As I read through the close to 100 posted comments, thoughts came to mind about our responsibility as citizens, Atlantic City residents, and Americans.
Damn, the old man makes sense now. Why couldn’t I see it when he was here?
"Investments which finance dreams are those same loans that built our nation."
Originally built as a HUD project, and now called The View, the building was constructed by the Army Corps of Engineers between the years of 1959 to 1962. Shaped like a half circle, the idea was to deflect hurricane-strength winds in its’ curve and turn them back to sea.
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1. Mark said... on Jun 28, 2011 at 07:01AM
“You sell real-estate of coarse you don't want this. Unfortunately, unethical lenders and real-estate brokers working together to convince people to buy homes they can't afford, is what got our country into this mess. All you really care about is your cut, then you wash your hands clean and walk away. How about steering clients towards houses they can afford, or telling them to save a little then start looking again?”
2. Tim said... on Jun 30, 2011 at 09:02AM
“Geoff, brilliant article. We are so close of being stipped of common sense in this Nation of ours. Those so called "leaders" have NO idea how the market functions at at all.
These are the same politicians that want to test educators to see if they are qualified to teach (I do agree)...but maybe we should test the politicians too and see if they even know the basic standards of how a free market functions!”