Hispanic Real Estate Professionals believe new and repeat borrowers will be better served if reforms are enacted
WASHINGTON, Sept. 14 /PRNewswire-USNewswire/ — Hispanic Real Estate Professionals overwhelmingly favor Federal Housing Administration reforms and believe Hispanic homebuyers and those with adjustable-rate subprime loans could be better served if proposed changes to FHA programs are quickly adopted by Congress, according to a survey released today by the National Association of Hispanic Real Estate Professionals (NAHREP). NAHREP and Wells Fargo Home Mortgage have joined together to call for Congress to act quickly to adopt these reforms in conjunction with a financial empowerment seminar the two organizations will hold Sunday, Sept. 16 , in Orlando , Fla., at the NAHREP annual convention. The event marks the official launch of NAHREP’s Hispanic Heritage month activities.
The survey asked for the opinions of NAHREP’s member network on the changes proposed to FHA under The Expanding American Homeownership Act, the potential impact on Hispanics, and the percentage of their customers that may have avoided foreclosure if such reforms had previously existed.
Survey responses from more than 700 members who live and work in Hispanic communities across the nation point to these trends:
— Hispanics would have been better served if FHA reforms had passed sooner and urge congressional passage for FHA reform as quickly as possible; — Current lack of activity in the secondary market is making it more difficult for some Hispanics and other borrowers to qualify for loans of any type, and FHA reform will contribute to alleviating this market condition;
“Our members overwhelmingly favor FHA reform and believe that a majority of their customers could benefit from an FHA loan,” said Felix DeHerrera, NAHREP Chairman. “Lawmakers have the opportunity to help hundreds of thousands of Latino families by providing the necessary programs to assist Hispanic buyers to both purchase and sustain their homes. The market downturn is likely to create a large inventory of more affordable housing. Hispanics, representing the fastest-growing segment of the population, are ready to take advantage of this newly created inventory.”
Highlights from the survey include:
— 96 percent of NAHREP members that responded to the poll are in favor of FHA reform; — 80 percent of respondents said 50 percent or more of Hispanic homebuyers that got a nonprime loan would have been better served by these proposed reforms. Passage of FHA reform remains a critical part of the solution; — 88 percent said that their Hispanic and low- to moderate-income buyers were having more trouble getting a mortgage in today’s market; again reflecting the urgent need for FHA reform. — While FHA was once a widely used financing option, only one-third of respondents now use FHA. If these reforms were adopted, however, 94 percent said they would be likely to recommend FHA loans to their customers; — 67 percent of respondents said they turn away one-third of their possible customers because they do not qualify for conventional mortgage products. However, 77 percent of respondents said that more than half of their customers could be helped if proposed changes in FHA programs are enacted; — 86 percent said it is important to increase FHA loan amounts to $417,000 to make the program viable in higher-cost markets;
Fifty-eight percent of NAHREP members who participated in the poll are real estate agents, while 34 percent are mortgage professionals and 8 percent work in other aspects of the business. Sixty percent of respondents live and work in the Southwest and West.
NAHREP believes that FHA financing options have the potential to help Hispanics avoid foreclosure losses when their mortgages reset. (Approximately one out of five subprime loans made to Hispanics is anticipated to go into foreclosure.) The trade group also estimates that if Hispanics get access to the financing they need and purchase homes at similar levels as in recent years, it would account for an estimated $74 billion in home purchases for more than 330,000 Hispanic families across America. Moreover, it would provide the type of mortgage options that have historically promoted sustainable homeownership for borrowers with limited traditional credit.
“Wells Fargo believes enactment of FHA modernization is an essential part of the solution to helping new and repeat homebuyers — as well as existing homeowners — who are in need of help,” said Phil Bracken , Executive Vice President, Government and Industry Relations, Wells Fargo Home Mortgage.
“If lawmakers act swiftly to modernize FHA and industry players lead with innovative products, Hispanic buyers have the potential to deliver a big shot in the arm to a softening housing economy,” said Timothy Sandos , NAHREP President & CEO. “Otherwise, FHA is likely to continue losing market share, which would be a traumatic loss of an ethically viable, reliable and trusted source of funds for lenders to reach Hispanics and other consumers.”
The National Association of Hispanic Real Estate Professionals, a non-profit 501c6 trade association, is dedicated to increasing the homeownership rate among Latinos by educating and empowering the real estate professionals that serve them. Based in Washington, D.C., NAHREP is the premier trade organization for Hispanics and has more than 14,000 members in 48 states and 56 affiliate chapters. For more information about the NAHREP Convention and the NAHREP-Wells Fargo Financial Empowerment Seminar on Sunday, Sept. 16, 2007 , please visit http://www.nahrep.org .
SOURCE National Association of Hispanic Real Estate Professionals
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