at Combs, President of the lenders offering loans to people
National Association of who end up in foreclosure,
Realtors (NAR), testified combined with the need to keep
before the Senate Subcommittee on loans for lower income families
Housing, Transportation, and and people with marred credit
Community Development. The available is what prompted the
purpose of her testimony was to NAR’s testimony.
address irresponsible and abusive
lending practices in the real The NAR and Congress are
estate industry. currently working to create real
estate standards and responsible
Foreclosed homes and the greater lending practices. The NAR has a
difficulty in obtaining subprime policy that calls for “stronger
loans are concerns of both the underwriting standards, for all
nation and the real estate mortgage lenders to act in good
industry during the current faith and with fair dealings and
market slump. The impact of the provide flexibility for unique
real estate market on the life circumstances.” The real
national economy is huge. Real estate trade organization also is
estate transactions accounted for asking for stronger penalties for
$20.7 trillion and 16% of the unscrupulous and irresponsible
nation’s economic activity in lenders, FHA modernization, and
2005. Currently 2007 continues to elimination of the “phantom”
see slower home sales. Real Mortgage Cancellation Tax.
estate analysts report that Finally, the NAR recommended that
median home prices from May of real estate home appraisers
2006 to May of 2007 dropped from become fully independent entities
$228,500 to $223,700. to ensure unbiased and accurate
property assessments.
The combination of predatory
According to Combs, “…when homebuyers and people with credit
families lose homes to issues seek home loans, the issue
foreclosure, our communities, the before the Senate will impact
housing market and our local and them directly. Tighter guidelines
national economies all suffer.” can protect mortgage holders from
In fact, a recent report on the predatory lenders. But these
social benefits of home ownership restrictions have also made it
found that individual net worth more difficult to obtain subprime
shows a direct correlation with loans at affordable interest
real estate ownership. The study rates. This has led to an
found that renters in 2001 held a increase in non-conventional
median net worth of $4,800; while loans like interest-only and
owners of real estate held a net balloon mortgages. While these
worth of $171,700. The Report, have their place in real estate,
Social Benefits of Homeownership they can end up in foreclosure
and Stable Housing, is available when offered to borrowers who
through the NAR website at href="http://www.realtor.org" support the loans. So it is in
title="http://www.realtor.org" the interest of the real estate
target="_blank">color="#001000" and individual homeowners to
size="-2">http://www.realtor.org< promote responsible and
/font>. accessible home lending
practices.
As first-time real estate
About the Author:
John Harris is a researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit San Diego Homes for Sale
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J Harris
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