January 31, 2011
- A d v e r t i s e m e n t
In spite of differences between Democrats and Republicans on reforming housing finance, both sides back proposals that would make mortgages more expensive and difficult to obtain.
Government officials and lawmakers want to make the market less vulnerable to another credit crisis, and all the options lead the same general direction: Borrowers will need larger down payments than in the bubble years, have higher credit scores, and pay extra fees to cover risks and premiums for federal guarantees on government-backed mortgage bonds.
While those measures would create a sounder system, they also mean that fewer borrowers will qualify for loans and the national home ownership rate — already on the decline — will continue to slide.