Homeownership has long been considered one of life’s benchmarks, earning the moniker The American Dream. But in today’s economic climate, realizing that dream is no longer an option for many people.
“There’s no question that we have a Realtor credit crisis,” said Lynette Magee-Praytor, president of the Mississippi Association of Realtors (MAR) and also general manager of Crye-Leike Realtors’ Mississippi region. “I personally think we have more of a credit crisis than we do a housing crisis, and we’ve got to fix the credit crisis for mortgages. We’ve gone more toward an FHA product, but until that’s fixed and our buyers are able to survive the process of qualifying, it’s going to continue to get tighter.”
To ease the loan-qualifying process, Realtors are steering home buyers to mortgage specialists. “They may find there’s some credit information that needs to be cleared up through advice from the lender,” said Magee-Praytor. “They may be given a work table to work out of it. If it’s down payment assistance with FHA they need help with, there’s a gift possibility. We’re also telling them they simply need to save some money.”
The Big Picture
MAR CEO Angela Cain said Realtors across the country have been advocating for a comprehensive stimulus package to reduce housing inventory, make mortgages more affordable and available, and help deserving families refinance or modify their loans so they can keep their home.
“We’re committed to these goals and to getting something done immediately,” said Cain. “There can be no doubt that stabilizing home prices and restoring confidence in the housing market are critical to an overall economic recovery.”
Cain said it is vitally important for President Obama and Congress to complete a bipartisan stimulus package focused on housing.
“The American Recovery and Reinvestment Act of 2009 is a good start, but much more needs to be done,” she said. “It’s imperative that the federal government act immediately to encourage home buyers to re-enter the market and to stop families from losing their homes to foreclosure.”
More specifically, federal “rescue” dollars should be directed to buy down mortgage rates, said Cain.
“A half-million additional homes could be sold if interest rates were lowered by just one percentage point,” she said. “Additionally, banks must find ways to help prevent foreclosures and unclog the credit market. These steps are necessary to stabilize housing and ensure that home values do not become artificially low, exasperating today’s problems.”
Realtors also support a $15,000 hom buyer’s tax credit and its expansion to include all home buyers, not just first timers, Cain said.
“The elimination of the repayment feature and the credit extension through December 2009 will have a meaningful impact for home buyers,” she said. “Reinstating the increased FHA, Fannie and Freddie loan limits that expired on Dec. 31, 2008, will also help the recovery by increasing mortgage liquidity. Banks need to begin lending again.
“We see first-hand that consumer confidence is shaken, but we find the dream of homeownership still very much alive. We urge all parties to work together — and work quickly — to restore confidence in the housing market and the U.S. financial system.”
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.