Friday, April 17, 2015
Testifying the recommendation before the Senate Banking Committee NAHB Chairman Tom Woods, a home builder from Blue Springs urged the Senate to pass the Mortgage Choice Act, legislation to improve access to home loans for working American families and first-time home buyers that was approved by the house earlier this week.
“By responsibly modifying the definition of points and fees for a home loan to be considered a qualified mortgage and ensuring that consumers can choose the lender and title provider best suited to their needs, this bill would allow more low- and middle-income families the opportunity to finance a home purchase,” said Woods.
Woods also called upon Congress to pass the Portfolio Lending and Mortgage Access Act. “This legislation is intended to ease the ability to repay requirements for community lenders who may fear originating non-qualified mortgage loans and, therefore, may limit access to credit for home buyers whom they believe to be creditworthy.”
In addition to congressional action, NAHB believes that federal agencies can – and should – take actions to alleviate burdensome regulatory requirements to consumer access to mortgage credit.
Lenders are currently imposing credit underwriting standards that are more restrictive than FHA, VA and Fannie Mae and Freddie Mac require, making it more difficult for prospective home buyers to obtain financing.
Moreover, fees for government-backed mortgages continue to be at an increased level, even though the credit quality of the underlying loans has increased significantly, Woods noted.
NAHB is also urging congressional and/or regulatory action on two additional fronts that specifically impact the home building industry – appraisals on new construction and access to housing production credit.
“Improper appraisal practices, a shortage of experienced appraisers, and inadequate oversight of the appraisal system continue to restrict the flow of mortgage credit and impede the housing recovery,” said Woods.
Likewise, despite signs of improvement in recent months, lenders are reluctant to extend new acquisition, land development and construction (AD&C) credit, citing regulatory requirements or examiner pressure on banks to shrink their AD&C loan portfolios as reasons for their actions.
Tags: Congress, Mortgage, Mortgage Choice Act, nahb
