Realtors Want To Reform The Mortgage Business

They support legislation to reform the Federal Housing Authority and get it more involved in today's credit mess.

From the StCharlesJournal:

We all have seen the sad stories in the media of those American families caught in the clutches of possible foreclosure. The look of desperation and heartbreak on their faces makes us all wish that we could do something to help.

To see any family's dreams of a place to call home drown in a sea of red tape and foreclosure is a true American tragedy.

As Keepers of the American Dream of Homeownership, Realtors are committed not only to helping their customers and clients find the home of their dreams but to helping them keep that home until they are ready to move. It is with this mission in mind that Realtors in St. Charles County joined members of our Realtor family from across the nation in urging the Bush Administration and Congress to enact changes to government-insured loan programs.I am pleased to report that our efforts have been successful. Some needed changes were enacted by the administration, and other temporary changes were adopted as part of the economic stimulus package approved by Congress earlier this year.

The mortgage reforms will make the federally insured programs more useful in today's real estate market. They will help potential buyers finance their new home and help existing homeowners refinance their debt to avoid foreclosure.

The most significant changes for our St. Charles County marketplace have occurred in the Federal Housing Authority (FHA) single-family mortgage insurance program.

The most important change has been a temporary increase in the FHA mortgage limits. The FHA program was designed to help American families become homeowners. Loan limits were established on a county-by-county basis to ensure the federal program helped its intended target: lower- and middle-income American families.

The loan limits have not kept up with the rising home prices across the country, and FHA loans were not a viable option for many home buyers. Here in St. Charles County, the loan limit went from $213,750 to $281,250.

These changes will make FHA loans once again a viable financing option for many more homeowners. Had FHA been a viable option for these home buyers in the recent past, some might have been able to avoid the risky sub-prime mortgages that led to many foreclosures.

Across the nation, it is estimated that the increase in FHA loan limits will allow an additional 138,000 Americans to achieve the dream of homeownership and will allow nearly 200,000 to refinance and potentially save their homes from foreclosure.

In another major change, FHA has started its FHA Secure program to help homeowners at risk of foreclosure. Until this program was initiated, FHA refinancing was not available to any homeowner with late payments or other credit issues. The new program will allow some homeowners who have otherwise good credit, but fell behind in their mortgage payments, to refinance through the FHA program.

In addition to helping many home buyers and homeowners achieve or maintain their homeownership dreams, these changes to FHA loans will increase home sales and strengthen the overall real estate market. The bad news is that the increased loan limits were passed as temporary measures as part of the overall economic stimulus package. Unless Congress acts, the increased loan limits will expire at the end of this year.

Realtors and other concerned citizens are urging Congress to act quickly to make the new loan limits permanent.

The FHA program, since its inception in 1934, has been one of the best programs conceived by the government. It has helped millions of Americans achieve the American Dream of Homeownership. Plus, it has been a consistently profitable program for the federal government.

Every year the FHA program has contributed a significant amount of money to the federal treasury to help fund other programs. Making the temporary loan limits permanent would not only help thousands of homeowners across the nation, it would generate increased revenue for the federal government. This is truly a win-win proposition for our country.

If you think you may benefit from the reforms to the FHA program, contact your Realtor or lender. Remember, having a Realtor by your side is the only safe way to undertake your journey to the home of your dreams.

Visit www.RightTimeForRealEstate.com to find out more about why 2008 is the "Right Time for Real Estate."

Keith McCulloh is the 2008 president of the St. Charles County Association of Realtors. E-mail him at comments@StCharlesREALTORS.com if you have any real estate-related questions or comments you would like to see addressed in this column.