NAHREP 2015 Policy Position Statement
The National Association of Hispanic Real Estate Professionals® annually reevaluates its position on a number of key policy issues which have a direct impact on the Association's ability to accomplish its mission. In 2015, the renewal of affordable housing goals for Fannie Mae and Freddie Mac ("GSEs") is of such critical near term importance that NAHREP is compelled to issue this Call to Action to regulators and policymakers.
2015 Call to Action - Renew Affordable Housing Goals
Last year, the Federal Housing Finance Agency ("FHFA") proposed new and higher affordable housing goals for the GSEs that would apply during years 2015 - 2017. The proposed goals must be finalized as soon as possible in order to appropriately address the needs of first-time and other underserved markets.
In 2013, data from the federal governments shows that Hispanic mortgage applicants experienced denial rates for conforming loans at twice the rate of their white counterparts: 22 percent for Hispanics and 11 percent for whites. Disproportionate denials for conforming GSE loans force Hispanic borrowers into loan programs where the costs may be higher than a GSE conforming loan. In some cases, creditworthy borrowers are denied access to homeownership, further broadening the wealth gap.
Homeownership is broadly understood to be the engine behind small business formation and wealth creation. When the government is engaged in the mortgage industry, it should be for the purpose of serving a need not adequately served by the private market.
Policy Priority - Access to Credit for Homebuyers
Narrow definitions of creditworthiness make it especially difficult for minority and first-time borrowers to qualify for and obtain a mortgage. Government regulators should address market factors that are restricting access to credit for minority borrowers.
Policy Priority - Inventory Disposition
To ensure community development and opportunities to build generational wealth in Hispanic and other diverse communities through owner-occupied homeownership, the laws, regulations and business practices associated with single-family property REO disposition should provide ample opportunity for sales to Owner Occupants BEFORE making the property available for sale to investors.
Policy Priority - Immigration Reform
Congress must pass comprehensive immigration reform to provide permanent legal status to the 11.2 million undocumented individuals who already live and work in the U.S. Immigration reform is needed to allow these immigrants to fully participate in the economy, including homeownership. This reform should include provisions for addressing a pathway to citizenship, deportation relief, and immigrant and non-immigrant work visas.
FHFA Request for Input - Draft Private Mortgage Insurance Eligibility Requirements and Request for Input on the G-Fees Charged by the GSEs
New Mortgage Rule is a Step Forward for Sustainable Hispanic Homeownership
Statement from the National Association of Hispanic Real Estate Professionals on the re-proposed qualified residential mortgage rule
SAN DIEGO - The National Association of Hispanic Real Estate Professionals (NAHREP) applauds the release of proposed regulatory changes to define the Qualified Residential Mortgage (QRM) rule. By aligning the QRM with the Qualified Mortgage (QM) rule released earlier this year, NAHREP believes this alignment of mortgage rules will help address industry concerns about further restricting access to credit. Harmonizing the two rules ensures safe and sound lending protections are put in place, without unduly restricting the housing market from efficiently accessing private capital.
Hispanics are expected to account for 40% of all new household formations and are anticipated to be the primary driver of first time buyers for this next generation. NAHREP applauds the revision from an earlier version of QRM which proposed an onerous 20 percent down payment requirement for all QRM loans. This requirement would have had a material impact on the affordability of low-down-payment loans, and would disproportionally have affected homeownership prospects for Latino households. NAHREP, along with many other constituencies, welcomes this new direction in policy.
"This new proposal takes into account the feedback from the broad range of stakeholders in the housing industry, "said Juan Martinez, president NAHREP. "Aligning the two mortgage rules was a top policy priority for NAHREP as it allows more Hispanic households, who are already motivated to achieve homeownership, to take part in the American dream."
NAHREP additionally urges regulators to move swiftly to finalize rule changes once this next period of public comments concludes.
NAHREP applauds President Obama
NAHREP applauds President Obama for affirming the importance of immigration reform as a key influencer in fixing our ailing housing economy. NAHREP estimates comprehensive immigration reform could result in an influx of $500b into the economy from an estimated 3M individuals who would have obtained legal status and would be eligible to finance a home. A copy of our report is available here. We urge the House to pass the bipartisan immigration reform bill already passed in the Senate.
NAHREP also supports the President's commitment to protect the 30-year mortgage and maintain a federal backstop as elements of a healthy housing market, with private capital providing a backbone for the overall market. These efforts will help to maintain access to homeownership for Hispanics and others.
Hispanics and other diverse homebuyers will continue to fuel the housing market for the foreseeable future. NAHREP urges the Obama administration to lay out specific objectives for our secondary mortgage market to provide additional liquidity for low down payment affordable mortgages. "If the government is going to continue to provide guarantees in the mortgage market it must focus on segments of the market that are not being adequately filled or served by the private sector" said Juan Martinez, NAHREP President. "The elimination of Fannie Mae and Freddie Mac must include a suitable replacement for their affordable housing mandates" concluded Martinez.
NAHREP applauds Obama administration action to fill FHFA director position
The National Association of Hispanic Real Estate Professionals (NAHREP) applauds the Obama administration's action to fill the vacant position of director of the Federal Housing Finance Agency (FHFA). As conservator of Fannie Mae and Freddie Mac, FHFA has the critical responsibility of ensuring the GSE's continue to provide a reliable source of liquidity for the housing finance industry with substantial focus on low to moderate income borrowers. NAHREP looks forward to working with the FHFA and its director, once confirmed, to help stabilize America's housing markets.
NAHREP Goes On The Record On Key Issues
The National Association of Hispanic Real Estate Professionals has weighed in on key issues that impact the housing market through a series of letters recently sent to decision makers and policy makers in the Beltway. The purpose of the letters is to exert the association's influence on issues that impact homeownership, affordable housing and access to mortgage capital for Latinos.
Click on the images below to read each letter.
San Diego, CA – March 27, 2015 - NAHREP CEO, Gary Acosta: Today HUD announced the appointment of Ed Golding as interim FHA Commissioner, Mr. Golding has extensive experience in real estate finance and is an outstanding choice for Commissioner. Hispanic homeownership has been curtailed in recent years due in large part to tight mortgage credit, NAHREP looks forward to working with Mr. Golding to address these and other issues facing the housing industry.
FHA Premium Reduction
San Diego, CA – January 8, 2015 – Today, President Obama announced a new effort to include creditworthy families who are able to afford homes but have been shut out of the market due to current lending restrictions that are some of the tightest in lending history. The Federal Housing Administration (FHA) is reducing annual mortgage insurance premiums by 0.5 percentage points from 1.35 percent to 0.85 percent.
The National Association of Hispanic Real Estate Professionals (NAHREP) supports the President's plan to reduce fees for FHA loans.
"Hispanics represent the largest segment of new homebuyers in the market today," said NAHREP President, Jason Madiedo, "The reduction in MIP premiums could facilitate the dream of homeownership for hundreds of thousands of additional creditworthy buyers."
The administration projects that up to 800,000 homeowners and 250,000 new homebuyers will benefit from the reduction in annual mortgage insurance premiums by the FHA. Latinos have historically relied on these loans with 63 percent of the loans they receive backed by government agencies. This translates into a $900 reduction a typical first-time homebuyer pays in an annual mortgage payment.
NAHREP also feels that lowering excessive G-Fees and Loan Level Pricing Adjustments at Fannie Mae and Freddie Mac are equally important in supporting the administration's stated goal to preserving broad and affordable access for all creditworthy families.
"Fannie Mae and Freddie Mac currently account for more than 80% of the market," said NAHREP CEO, Gary Acosta, "Reducing FHA fees is an important first step, but getting the GSE's back in the first-time homebuyer market would have an even greater impact."
The reduction on FHA premiums will continue to expand the growth of the Mutual Mortgage Insurance (MMI) Fund. The FHA estimates a contribution of $7-10 billion annually in new capital reserves each year which will result in improved risk management and strengthen the housing market. The housing market is also expected to be stimulated by the increased demand this will create in real estate servicing and residential construction, thereby creating new jobs in the housing industry.