Realtors urge mortgage finance reform

The National Association of Realtors recently called for a comprehensive reform of the mortgage finance system in a testimony before the House Financial Services Subcommittee.

The NAR said reforming the secondary mortgage market is key in making sure there is a reliable source for mortgage lending to consumers in a variety of markets, which will help the nation's economy recover. In response to draft legislation from Representative Scott Garrett, a Republican from New Jersey, the NAR said bringing private capital into the secondary mortgage market could help develop standards and uniformity needed in the mortgage industry. Investors would have greater transparency that would help restore confidence and help the private label securities market.

"As the leading advocate for homeownership, NAR agrees with Rep. Garrett that greater transparency is needed in the trading of mortgage backed securities; however, to restore confidence in the market and ensure that the housing finance system works more efficiently and effectively in the future, this proposed legislation must be coupled with a comprehensive strategy for reforming the secondary mortgage market," saidTom Salomone, broker-owner of Real Estate II in Coral Springs, Florida.

It will also help the mortgage industry if more American consumers qualify for mortgages. To achieve this, credit scores must be improved. The Washington Times reported many consumers are currently renting as they work on improving their credit score to hopefully acquire a mortgage in the future. Accounts that are factored into a credit score include student loans, credit cards, auto loans, utility bill and cellphone bills. Thus, eliminating debt will help a borrower qualify for a loan faster.

More News