Friday Facts Octovber 29, 2010

October 29, 2010

Thanks in part to NAR’s efforts, Congress has approved a one year extension for the National Flood Insurance Program until September 30, 2011.

Real Trends reports that borrowers with credit scores below 620 are unlikely to get a 30 year fixed conventional mortgage – even with a down payment of 15-25%. Nearly 30% of Americans has a credit score this low. 47% of Americans have scores of 720 or above. For each 20 point credit score increase, the average low APR declines 0.12%.

Inman News published bits and pieces from a study done by Harvard. “Blame for the financial crisis lies with financial institutions that established the underwriting standards, agencies that rated securities backed by non-prime loans, firms that wrote credit default swaps against them, and the regulators that were entrusted with policing the system.” “It was they – not mortgage brokers, mortgage bankers, or borrowers … that determined the products that could be offered, the underwriting standards that would be tolerated, the requirements for capital reserves against losses, and the incentive structure for mortgage brokers … that rewarded volume more than long-term loan performance. In hindsight, there were significant regulatory and market failures.”

A poll of likely voters conducted by NAHB (National Association of Home Builders) showed that 81% support keeping the federal mortgage interest deductions. 76% support keeping the deductions for state and local taxes including property taxes.

MAR received funding from NAR to help defeat Ballot Question #2 which seeks to repeal Chapter 40B. The Massachusetts Affordable Housing Law is responsible for 80% of the affordable housing created over the past decade in Massachusetts outside the major cities. That translates to approximately 58,000 homes. Since 2001, Habitat for Humanity of Cape Cod has developed 47 homes (of a total 60) utilizing this law.