DENVER, June 15, 2015 /PRNewswire/ -- Friday's edition of
Investor's Business Daily carried an Op-Ed by RE/MAX CEO Dave Liniger supporting recent
government policies that mark a return to more reasonable mortgage
standards.
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FHA has reduced the cost of mortgage insurance, while Fannie and
Freddie have said they are reducing down payment requirements from
5% to 3%. Many critics have reacted by saying this puts the country
on the road to another housing crisis. However, the Liniger Op-Ed
points out that the mortgage environment is much different today
and new policies still require borrowers to meet a number of
qualifications, which must be documented.
"What brought on the housing crisis was the popularity of
loans that had low introductory rates or did not require
verification of income," said Liniger. "As a result of the
crisis, lending standards went from too lax to overly
restrictive. With recent changes, the industry is simply
returning to reasonable practices that will allow ordinary people
with good credit to enjoy the benefits of home
ownership."
Statistics demonstrate that down payments alone are not a
reliable indicator of future default on a mortgage. The FHA has for
years successfully insured borrowers who make a 3.5% down payment
on a home purchase. Since it can take several years to save enough
to make a down payment, FHA has been the route taken by many
first-time buyers.
Because FHA has charged higher fees, many first timers have
turned elsewhere for a mortgage or decided against buying a home
entirely. According to the National Association of Realtors, the
current participation of first-time buyers is 30% of all home
sales, while the historic norm is 40%. Liniger says the housing
recovery cannot be considered complete until this segment of the
market returns.
"We shouldn't punish today's mortgage borrowers for the
mistakes of the past. FHA, Fannie and Freddie are on the right
track, supporting aspiring home buyers, the housing recovery and
the overall economy," Liniger added.
Housing accounts for 18% of our national GDP. More reasonable
and accessible mortgages not only promote a strong housing market,
but a sustainable economic recovery as well.
About the RE/MAX Network:
RE/MAX was founded in 1973
by Dave and Gail Liniger, with an
innovative, entrepreneurial culture affording its agents and
franchisees the flexibility to operate their businesses with great
independence. Over 100,000 agents provide RE/MAX a global reach of
nearly 100 countries. Nobody sells more real estate than
RE/MAX.
RE/MAX, LLC, one of the world's leading franchisors of real
estate brokerage services, is a wholly-owned subsidiary of RMCO,
LLC, which is controlled and managed by RE/MAX Holdings, Inc.
(NYSE: RMAX).
With a passion for the communities in which its agents live and
work, RE/MAX is proud to have raised more than $150 million for Children's Miracle Network
Hospitals® and other charities.
For more information about RE/MAX, to search home listings or
find an agent in your community, please visit www.remax.com.
For the latest news about RE/MAX, please visit
www.remax.com/newsroom
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SOURCE RE/MAX, LLC