Solutions to Mortgage Crisis Must be Grounded in the Best Interests of Homeowners
Bruce Hahn, President of the American Homeowners Grassroots Alliance, has recently made the following statement regarding the steps that he says Congress should take to reduce the impact of the mortgage market turmoil.
Tomorrow, the House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing focusing on subprime and predatory lending. The House legislators will look at current market conditions and consider what steps may be appropriate to remedy the recent jump in foreclosures.
There are a number of steps that Congress should take to improve mortgage liquidity, home affordability, and limit the impact of the recent foreclosures. Solutions must be grounded in the best interest of the American homeowners to ensure the market stays strong and families are still able to take part in the American dream.
According to Bruce Hahn, president of the American Homeowners Grassroots Alliance (AHGA), it is critical that Congress focus on maintaining the liquidity of mortgage financing because failing to do so will promote a decline in home values that will only increase foreclosures. Hahn is available to discuss how a balanced approach of narrowly focused regulatory improvements, combined with ongoing promotion of affordable homeownership with important tax deductions, will provide stability in the market and maintain home values.
Homeowners must be properly educated on the inherent risks of certain types of mortgages before accepting an unsuitable program. Better disclosure and more stringent national professional standards for mortgage brokers and loan officers must be established in order to assure that home buyers receive competent advice and that mortgage professionals have a greater personal investment in their own careers.
Congress should maintain the ability of GSEs to serve the largest possible number of home buyers, and seek ways to expand the ability of FHA and other vehicles to serve more home buyers. Private mortgage insurance is an important tool in promoting mortgage liquidity and is expected to play a significant role for current homeowners and potential new homebuyers. Thanks to last minute actions by Congress in 2006, this mortgage insurance is now tax deductible. Heading into tax day, homeowners must be aware that they can save an average of $300 to $350 because of mortgage insurance tax deductions in 2007.
Lenders require private mortgage insurance when the down payment is less than 20 percent. Making private mortgage insurance tax deductible is a responsible and important measure that greatly benefits low and middle income families and maintains stability in the housing market.
Bruce N. Hahn is the president of the American Homeowners Grassroots Alliance (AHGA) and the president of the American Homeowners Foundation (AHF).