NAHB Encourages Congress to Rethink Refinance Costs

The National Association of Home Builders recently encouraged Congress to reconsider a proposal released by six federal agencies to implement credit risk retention provisions included in the Dodd-Frank Wall Street Reform and Consumer Protection Act and require homeowners to have at least a 25 percent down payment to qualify for a lower rate QRM for refinancing.

According to the NAHB, almost 25 million homeowners in the United States would have their mortgages increased if this proposal were to pass. If a homeowner looks to refinance their mortgage but does not qualify for a QRM, they will have to pay additional costs associated with the lenders' risk retention requirements outlined in the bill.

The analysis by the Coalition for Sensible Housing Policy, which the NAHB is a member of, in a white paper to Congress said the proposed rule forces creditworthy, responsible homeowners into the higher cost non-QRM market, thus hurting an already weak housing market.

The National Association of Realtors also addressed Congress, when it recently pushed for action to be taken on the debt ceiling issue. Ron Phipps, President of the NAR, said a resolution on the debt ceiling crisis must be met in order for Congress to address the other issues affecting the nation.

"The indecision in Congress is paralyzing progress on other fronts, and it is harming home buyer confidence and negatively affecting home sales," Phipps said.

The New York Times recently reported that President Barack Obama called on Congress to produce a fiscal plan that could be passed by both parties. After a caucus meeting, House Republicans said Speaker of the House John Boehner agreed to modify his plans to get the necessary votes for its passage. Currently, Boehner's plan raises the debt ceiling for a few months, so spending cuts can be made, according to the news source.

"I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support from both parties in the House, a plan that I can sign by Tuesday," Obama said at a press conference.  

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