Key Issues
The mortgage-bond market has to "resolve several key regulatory and market issues, including reform of underwriting and servicing standards, greater investor protections, and addressing the second mortgage problem," Redwood's Martin said last week during a House subcommittee hearing, referring to borrowers' ability to reduce home equity with additional loans after their mortgages are originated.
Richard Green, chairman of the Lusk Center for Real Estate at the University of Southern California, said at yesterday's hearing that explicit government guarantees of mortgage lending are necessary. He pointed to a recent experience obtaining a jumbo mortgage in the private market.
"It was very striking to me because when my wife and I got our first mortgage, when we had our jobs for a year and all we had in the bank was a down-payment and that was it, it took like two days to get approved," he said. "It took us four months to get approved on our jumbo non-cashout refinance."
To view the entire article, please visit the link below.