Feds calls for more loan modifications to boost homeownership

A recent paper from the Federal Reserve Board recommends lending requirements be loosened so more consumers can acquire a home loan and more homeowners can refinance and avoid foreclosure. The paper is calling for increased lending to creditworthy home buyers and more loan modifications, refinancings and short sales to reduce housing inventory and avoid foreclosure to stabilize home prices.

The National Association of Realtors agrees with these suggestions as a way to spur an economic recovery. In the 2011 NAR Member Profile survey, 34 percent of realtors said the most important factor in limiting a client's ability to buy a home was difficulty in obtaining a mortgage. Many homebuyers are being denied mortgages due to tight lending requirements, preventing them from absorbing housing inventory and allowing the market to recover.

In addition, a survey from the National Association of Home Builders found voters still value homeownership and demand policymakers to support measures to boost the housing market. The poll showed owning a home is still an integral part of the American Dream, and Americans are expecting lawmakers to put more effort into developing housing policies to boost homeownership opportunities.

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