Just What Housing Needs is Reduced Lending?

By
Real Estate Mortgage Broker with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

 

“Just What Housing Needs is Reduced Lending?”

 

During one of the Presidential debates, Mitt Romney spoke a couple of different times about Dodd-Frank and over regulations as a result of this act. The damage continues to be done and all of the regulations haven’t even been written.

 

Over regulation with the current administrationThe sooner that Dodd-Frank is repealed, the sooner that the burden of over regulations can improve mortgage lending, housing and employment in this country.

 

 

 

Proposed Mortgage Rules Could Reduce Lending by 20%

 

By: The NicheReport

 

 

Mortgage lending costs in the United States could increase in 2013, prompting lenders to pass on the burden to borrowers and hampering the nascent housing recovery. Such are the observations published in a report by the American Action Forum (AAF), a think-tank based in Washington, D.C. The report is titled Regulatory Reform and Housing Finance: Putting the “Cost” Back in Benefit-Cost.

 

The AAF report looks at three factors that go beyond the definition of a qualified mortgage under the Dodd-Frank mortgage rules that could potentially go into effect next year. These factors include the Basel III agreement on capital standards for banks, mortgage underwriting and securitization. Should these go into effect, the report estimates that mortgage lending activity could be reduced by as much as 20 percent.

 

Looking Back to 2001

 

The report uses the year 2001 as the baseline point of reference for the study, and establishes projection for the three years. The impact to Gross Domestic Product (GDP) would be 1.1 percent, and the number of new constructions would drop by at least one million. The lending standards adopted by mortgage lenders since Dodd-Frank passed in 2010 are already very strict compared to 2001. The report explains that mortgage originations would be directly affected by the new rules.

 

The qualified mortgage issue has been conspicuously absent from the electoral campaigns of the presidential hopefuls. Former Governor Mitt Romney lightly touched on the matter during the first presidential debate, which happened to be his shining moment of his campaign. What actually constitutes a qualified mortgage is in the hands of the Consumer Finance Protection Bureau (CFPB), and the proposed rulemaking is still being reviewed.

 

The AAF president, Douglas Holtz-Eakin, expressed his surprise at the lack of attention by legislators to the proposed rules. His view is not being shared by other think-tanks. The Center for American Progress was quoted in the Wall Street Journal as being more optimistic with regard to the potential qualified mortgage rulemaking. This view supports the idea of consumer protection regulations eventually leading to increased mortgage lending and, more importantly, preventing another housing bubble.

image: Damian Brandon/freedigitalphotos.net

 

Posted by

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

Like me on facebookfollow me on twitterConnect with me on linkedin

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

close

Re-Bloggged 1 time:

Re-Blogged By Re-Blogged At
  1. Charles Stallions 11/09/2012 09:21 PM
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the robot to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Topic:
ActiveRain Community
Location:
Connecticut
Groups:
Mortgage Solutions
Connecticut Professionals
Consumer Mortgage Tips
All About Mortgages/Mortgage Networking
Tags:
over regulation
presidential debate
doddfrank act
employment
housing
mortgage lending

Comments 11 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the airplane to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
919,965
Conrad Allen
Webster, Ma, Realtor
Re/Max Professional Asociates

Hi Joe.  Dodd Frank is such a disaster to the nation's economy.

November 02, 2012 04:12 AM
Rainmaker
494,130
C. Lloyd McKenzie
MBA - Prudential Allstar Realtors -
Prudential Allstar Realtors

Good Evening Joe:

Thanks for sharing this excellent post.  I always look forward to reading your posts

November 05, 2012 08:07 PM
Rainmaker
1,238,538
Charles Stallions
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.
Charles Stallions Real Estate Services

We may be headed to an all cash society better known as Socialism. Obama wants to help the middle class and string up the rich. Dodd Frank will do right the oposite, the rich have cash and will buy of the houses and the middle class will rent these houses and never own.

November 07, 2012 05:19 AM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Joe, although I am not a mortgage specialist by any means, I consider myself much more "up" on financing than many Realtors.  I really don't think Dodd/Frank is going anywhere... I really don't.

Also, as far as interest rates are concerned... my local Fort Worth/Dallas market gives much more value for the housing dollar, and a high degree of financing is through the FHA.  Since Obama won the election on Tuesday, the rates have actually come down a tad... and are now at 3.25% for 30 years, with 0 points and 0 origination.  Not bad at all... :)

November 09, 2012 09:36 PM
Rainmaker
995,711
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Charles in #10:  Yeah, sure, we are headed for an "all cash society better known as Socialism."  That stilted view has gotten to be seen by so many as being only from the far right fringe.  I really don't remember very much, if any, mention of that in either Presidential campaign.

And "stringing up the rich?"  I've never seen it presented to that extreme except by those on the fringe, either.  All Obama is saying is that having things a bit more "fair" makes more sense than how things are currently.

November 09, 2012 09:42 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the pencil to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
781,140

Joe Petrowsky

Your Mortgage Consultant for Life
What mortgage questions can I answer for you
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the umbrella to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: