Realtors call for a stable housing market

The National Association of Realtors recently wrote a letter to Shaun Donovan, secretary of Housing and Urban Development; Timothy Geithner, secretary of the Treasury; and Gene Sperling, director of the National Economic Council offering recommendations for how to stabilize the housing market.

In the letter, the NAR President Ron Phipps said that pending legislation that could tighten access to credit and mortgages is not a solution to the housing market's troubles. Rather, the NAR supports the lowering of down payment requirements and policies to help qualified borrowers acquire safe mortgages.

According to the NAR, Qualified Residential Mortgage requirements under the Dodd–Frank Wall Street Reform and Consumer Protection Act are too restrictive, and a broader definition of QRM could reduce defaults without denying ownership to people with good credit scores. The NAR also requests that the underwriting standards for mortgages from government and government-sponsored lenders should be reduced.

"Requiring a higher down payment does little to reduce default risk, and only strips home buyers of their savings and increases the number of borrowers who are unable to purchase a home," Phipps said. "We cannot have a viable housing market and economic recovery until creditworthy borrowers are able to obtain mortgage financing."

Government-sponsored Freddie Mac recently released its U.S. Economic and Housing Market Outlook for July 2011, which predicted the housing market will surpass home sales of 2010 by 3 to 5 percent by the end of the year. This means the enterprise does not foresee a double-dip in the market.  

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