Ben Bernanke Couldn’t Refinance His Mortgage


Just how inflexible are lending standards these days? Ben Bernanke said at a conference Thursday that he’d been unable recently to refinance his mortgage.

“It’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said at a conference in Chicago, according to Bloomberg News.

But wait. Surely a man with high income, lots of equity in his home, good credit and a solid net worth must be able to get a mortgage. Mr. Bernanke stepped down as the chairman of the Federal Reserve in January and joined the Brookings Institution as a “distinguished fellow in residence.” He’s also writing a memoir and giving speeches (reportedly for hefty speaking fees).

The broader point Mr. Bernanke was making isn’t that credit standards on their own are unnecessarily restrictive. Borrowers who can make a 3.5% down payment with a 650 […]

Homebuilder Confidence in U.S. Increases to a Nine-Year High


Confidence among U.S. homebuilders rose in September to a nine-year high, showing the industry is gaining ground and will be a source of momentum for the economy.

The National Association of Home Builders/Wells Fargo sentiment measure climbed to 59 exceeding the highest estimate in a Bloomberg survey of economists, from 55 in August, the Washington-based group reported today. Readings above 50 mean more respondents said conditions were good.

Improvement in the job market and low interest rates spurred buying interest this month, as the group’s index of foot traffic through model homes jumped to the highest level since October 2005. Faster wage gains would provide extra momentum for residential real estate, which has seen lackluster demand from first-time buyers.

“Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive […]

High GSE Loan Fees Keep Buyers on Sidelines


Fannie Mae and Freddie Mac are charging excessive loan fees, according to some industry groups, who claim it is time to stop overcharging borrowers who use conventional financing to buy a home.

It’s a theme many in the industry return to in comment letters the Federal Housing Finance Agency received in response to a “request for input” on setting guarantee fees.

Fannie and Freddie hiked their loan fees in reaction to the housing crash and the staggering losses they suffered. The fee increases were also due to the failure of several private mortgage insurance companies and other insurers not living up to their obligations to pay claims.

By statute, the government-sponsored enterprises must require private mortgage insurance when the loan-to-value ratio exceeds 80%. The homebuyer pays for the insurance, which provides the GSEs with first-loss protection.

But six years later, the GSEs and the Federal […]

FHA Fees Are Holding Back First-Time Homebuyers


In recent testimony before Congress, Federal Reserve Chairwoman Janet Yellen confirmed what many aspiring homebuyers have known for several years. “It has now become the case that any borrower without a pretty pristine credit rating finds it awfully hard to get a mortgage,” she said.

Lenders aren’t the only ones acting in a risk-averse manner. Well-intentioned but outdated federal policies are keeping America’s housing sector from achieving a full recovery.

In recent years, the Federal Housing Administration, which has been charged with supporting first-time homebuyers since the Great Depression, has raised its fees to levels that are pricing many creditworthy Americans out of the market. That’s bad for the American dream and for the economy. What our economy needs now are fewer barriers to first-time homeownership — not more.

First-time home purchases are now at historic lows. They have accounted for only 28 […]

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