The recent revelation by former Federal Reserve Chairman Ben
Bernanke about being turned down for a home refinancing loan should serve
as a call-to-action to fix onerous lending standards, said Ronald Peltier, CEO
of HomeServices of America—an affiliate of Warren Buffett's Berkshire Hathaway and the nation's
second-largest full-service residential brokerage firm. We have to bring
common sense back, Peltier said on CNBC's Squawk
Box Tuesday. The process is too mechanized. It doesn't allow
for common sense to enter into the mortgage-qualifying process. The standards
are just too high, along with the down payments. Earlier this month,
Bernanke told a housing conference he had tried unsuccessfully to refinance his
mortgage.How can you understand the wisdom or the logic of a former Fed
chairman not being able to qualify for a refinance on a relatively small number
given he's in the one percent, said Peltier—urging a return to the
lending standards of before the housing bubble, which burst in dramatic fashion
between the 2006 home price peak and the 2012 bottom. Eight years later, as
Bernanke and many other Americans have found out, it's still really hard to get
a mortgage—a double-whammy since historically low interest rates are creating a
big opportunity for qualified buyers. Many would-be first-time home buyers
can't get approved—forcing them to become renters. But Peltier hopes that'll
change. When the mortgage markets loosen and the credit standards get
more normalized, we see that [renters] will move into purchases of homes.
Another optimistic sign, according to the HomeServices CEO, support for the
housing recovery has moved from mainly investor-buying for rentals to people
who actually intend to live in the homes they purchase. At the start of
the recovery two years ago, we were seeing a large percentage of the home
purchases being transacted by investors and by private equity. The good news is
we are getting a more normalized mix of buyers, Peltier said.Matthew J.
Author:Judy Collins Phone: 609-492-2090 Dated: October 24th 2014 Views: 358 About Judy: ...
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