HUD hosts housing summit to address problems

WASHINGTON – May 15, 2007 – How can the U.S. minimize the impact from risky loans, predatory lending and other current real estate problems? The U.S. Department of Housing and Urban Development (HUD) yesterday hosted a Homeownership Summit with leading stakeholders in the housing community to discuss the impact of risky, high-priced loans, departmental actions against predatory lending and how modernizing the Federal Housing Administration (FHA) will provide a safer alternative to exotic mortgages.

HUD Secretary Alphonso Jackson delivered the keynote address, where he laid out seven areas of agreement for preserving and protecting homeownership, helping new homeowners keep their homes and improving lending practices.

“We must make the American Dream a realistic possibility for as many Americans as possible,” said Jackson. “This is not an option; it is a duty. And that goes beyond policy-makers and regulators. It is a shared duty with investors, associations, consumers and communities themselves.”

HUD invited over 150 investors, consumer advocates, decision-makers and key advisors to assess the current housing situation and offer recommendations. Panel participants met in closed-door sessions moderated by Michelle Singletary of the Washington Post and syndicated columnist Ken Harney.

Jackson's laid seven areas of agreement for protecting and preserving homeownership are:

1. Homeownership is still the best investment for the long-term.
2. Every responsible step must be taken to enable Americans to become homeowners.
3. Lending should be legal, fiscally responsible and ethical.
4. Housing counseling is critical and borrowers must read the fine print before buying a home.
5. There is no place for predatory lending in the housing industry.
6. Modernization of the Federal Housing Administration is long overdue.
7. A taxpayer-funded bailout will not resolve housing concerns.

Jackson says the summit was a part of HUD’s effort to encourage Congress to pass legislation that modernizes the FHA. The program has helped more than 34 million families become homeowners over the past 73 years, but as lending practices have evolved and modernized, the FHA has been unable to do so without legislation.

“We have internally modernized FHA as much as we can,” says Jackson. “But the time has come to bring FHA into the 21st century. A new FHA could be an antidote for predatory lending and for sub-prime difficulties.”

Last year, HUD proposed a set of changes to the FHA program that would expand its reach by eliminating outdated downpayment requirements, customizing mortgage premiums for each homebuyer according to risk, and raising loan limits across the country. The bill, the Expanding American Homeownership Act of 2006, passed the House with bipartisan support in July 2006.

© 2007 FLORIDA ASSOCIATION OF REALTORS®

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