In the wake of President Barack Obama's announcement to further assist a greater number of underwater households by letting them refinance into lower mortgage rates, the National Association of Mortgage Brokers has expressed its support of initiatives that could help solve the housing crisis.
According to a statement by the industry group, members of the association specifically support three key areas of the administration's plan.
"When this plan is implemented and homeowners are given the opportunity to refinance their homes, it will create capacity issues," said NAMB president Donald J. Frommeyer. "It is imperative that any refinance program that is created, revised and offered to responsible homeowners is available to all origination channels so that they have the ability to help consumers with their loan."
Specifically, the association stated that it supports the White House's plan to continue to assist qualified homeowners who have been responsible about making their payments. However, since many of these borrowers are currently prevented from refinancing in accordance with current lending standards due to high levels of negative equity, NAMB applauds the president's plan to extend aid to these households.
Additionally, NAMB adds that the money saved on annual mortgage payments through a refinance are funds that can be spent to further stimulate the economy.
"It is important if we use the Federal Housing Administration’s loan programs for these refinances, that we make sure the new loan is suitable for the consumer and the consumer has the ability to repay," said NAMB government affairs committee chairman John H.P. Hudson. "This will ensure that the FHA program remains strong for future homeowners to utilize fixed-rate financing as a tool in purchasing their future home and as a refinancing option for their current home."
Meanwhile, NAMB expressed its support of the president's announced Homeowner's Bill of Rights that aims to further provide safety and soundness for consumers from pitfalls of the mortgage industry, while streamlining the process to make it easier to qualify for home loans.
Lastly, the association supports an initiative to readily make the sale of foreclosed houses more available to real estate investors. By converting these properties into affordable rental unites, it could help households currently displaced by the recession, while further reducing the nation's distressed properties inventory.