New government programs and talk about eliminating the housing mortgage deduction

New government programs and talk about eliminating the housing mortgage deduction

The NAR National Association of Realtors held their annual conference in New Orleans last week as they had a lot to discuss about the future of the housing market. Most of the topics discussed in the conference were NAR news and changes. However, a new pilot program from FHA maybe being offered down the road.

FHA has a new pilot program called shared-equity, under this program FHA borrowers could partner with an FHA qualified third party investor, who would contribute some capital for the home purchase to help buy down the principal of the mortgage. The capital is provided at no interest; in turn the investor would share any future equity the property may have down the road.

It certainly has some interesting possibilities, however, I do not see this being an easy sell considering how long it may take for properties to actually have any substantial equity.

National Association of Realtors also urged lenders to easy their credit policies to increase lending to qualified borrowers. Right now the only people really buying properties are private investors. Even if you are a qualified borrower the guidelines are so strict now, it keeps a lot of potential good doer future homeowners from even thinking about looking for a home. NAR has reviewed and recommended new credit policies around specific lending issues; this would encompass education and research, use of credit scores, the impact of adverse credit events, and loan modifications.

Also suggested at this meeting by Thomas Hoeing of the Federal Reserve Bank of Kansas City was to eliminate the mortgage tax break for homeowners. I know, I know was he really serious? Come on now really? Does he think this is going to fix anything? The NAR certainly was taken back that someone would even suggest it. The housing tax break is one of the incentives of home owner ship in our country. Eliminating it certainly would not put us any closer to a recovery, in fact it would probably hinder and slow the economic recovery much needed at this time.

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