Should the federal government start backing mortgages even longer than 30 years? Philadelphia Federal Reserve Bank president Patrick Harker thinks it could be a solution to an emerging problem in the housing-finance ecosystem.
“In general, the housing market is largely healthy; if anything, it’s not keeping up with demand,” Harker said Tuesday. “The number of homeowners in forbearance on their mortgage has dropped by 90% since peaking in 2020.” Lenders, Harker noted, could consider solutions that would limit the costs to modify loans while providing borrowers with payment relief. And he pointed to 40-year mortgages, specifically from the Federal Housing Administration, as one such solution.
Having access to a 40-year loan may be critical for many homeowners with FHA, USDA and VA loans. Throughout the pandemic, these mortgage borrowers were more likely to be in forbearance than people with loans backed by Fannie Mae and Freddie Mac. FHA, VA and USDA loans come with less stringent requirements in terms of credit scores and down payments, making them more popular with less affluent home buyers.
Wouldn’t the municipalities just increase the property taxes to match the probable increase in property value this would cause? Negating the entire point of it.
JohnLair9
Of course the grabblers want you in debt for an additional 10 years
How about if a place to live was a right?
For banks and investors!!!!
How about we raise rates to make hosing more affordable.
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