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On Apr. 8, 2013, NAR submitted comments on the impact that growing student debt will have on the ability of consumers to access mortgage credit, particularly first time homebuyers. NAR President Gary Thomas wrote that the changing regulatory landscape of mortgage finance will contribute to an already tight lending environment by imposing standards that are even more strict, largely from three related mortgage regulations:
- Americans burdened with growing monthly debt payments will have restricted access to mortgage credit under the QM rule.
- Consumers unable to save for a down payment due to growing debt burdens will be denied access to the most reasonable loan terms under the proposed QRM definition.
- Potential homebuyers may find that banks are unwilling to lend to those who are unable to save for a significant down payment due to substantial cost increases. The proposed Basel III rules have raised the ‘cost’ for banks to hold non-government backed mortgages with less than a 20% down payment by 50-100%.
NAR encouraged regulators to work collectively to understand the broad implications of the entire economic framework of such issues as growing debt, regulations, and the future accessibility of housing finance.
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